Crypto funds post second week of outflows at $1.7B: CoinShares

Digital asset investment products experienced significant capital withdrawal for the second consecutive week, registering net outflows totaling $1.7 billion, according to the latest report from CoinShares. This substantial movement marks one of the largest recorded weekly outflows for the sector, largely neutralizing the massive inflows seen immediately prior to the launch of U.S. spot Bitcoin ETFs.

The overwhelming majority of the selling pressure was concentrated in Bitcoin (BTC) products, which saw an unprecedented $1.97 billion depart from funds. This aggressive selling is closely tied to the market rebalancing triggered by the approval of U.S. spot Bitcoin Exchange-Traded Funds (ETFs). Analysts attribute the extensive outflows primarily to the conversion of the Grayscale Bitcoin Trust (GBTC) into an ETF, prompting existing investors to liquidate positions, potentially due to fee structure changes or mandatory redemptions.

Geographically, the United States accounted for nearly all the withdrawals, reflecting the domestic nature of the new ETF ecosystem and the large size of the converted GBTC structure. While BTC funds faced extreme headwinds, other digital assets showed a mixed picture. Ethereum (ETH) products managed to stabilize, recording marginal outflows of $13.6 million.

In a sign of continued interest in altcoins, certain funds saw positive flow, notably Solana (SOL) funds, which attracted $4.2 million in capital. Despite the record outflow figure, CoinShares suggested that this volatility reflects necessary structural adjustments following the introduction of major new investment vehicles, rather than a broad capitulation on digital assets.

Source: Crypto funds post second week of outflows at $1.7B: CoinShares