Hawkish Fed, whales fuel second week of crypto ETP outflows

Crypto investment products recorded $1.7 billion of net redemptions in the week through Sunday, marking a second consecutive week of outflows, according to CoinShares.

The latest withdrawals followed $1.73 billion the previous week, bringing two-week outflows to $3.43 billion. Year-to-date flows turned negative by about $1 billion. Assets under management in crypto exchange-traded products fell to $165.8 billion.

By asset, Bitcoin products accounted for the largest share of redemptions. Ether funds saw $308 million leave during the week. Solana and XRP products posted outflows of $31.7 million and $43.7 million, respectively. Short Bitcoin products, which rise when prices fall, drew about $1.7 million of inflows.

By issuer, BlackRock’s iShares led with $1.2 billion in withdrawals. Grayscale recorded $300 million of outflows, and Fidelity had $197 million. In contrast, ProFunds Group and Volatility Shares attracted $139 million and $61 million in inflows. CoinShares highlighted Hyperliquid as an outlier linked to activity in tokenized precious metals.

“We believe this reflects a combination of factors, including the appointment of a more hawkish US Federal Reserve Chair, continued whale selling associated with the four-year cycle, and heightened geopolitical volatility,” wrote James Butterfill, head of research at CoinShares.

The outflows came ahead of a weekend drop in crypto prices. Bitcoin briefly fell below $75,000 on Sunday. The Crypto Fear & Greed Index stood at 14, labeled “Extreme Fear.”

According to our earlier report, investors started the week reducing risk, moving funds into cash and short-term U.S. Treasuries. Crypto prices fell alongside ETF flows, precious metals saw a sharp correction after recent record highs, and the S&P 500 pulled back from the 7,000 area. The main drivers were Trump’s tariff policy, a U.S. budget fight, and rising tension around Iran.