Crypto investment products saw net outflows of $1.07 billion last week, snapping a six-week run of inflows. The reversal was driven largely by a sell-off in Bitcoin ETFs, with altcoin funds weathering the storm relatively well. CoinShares attributed the pullback to geopolitical factors.
A $1.07 billion reversal
The week ending May 17 marked a sharp turn for digital asset funds. After six consecutive weeks of taking in money, the sector lost over a billion dollars. That's the largest single-week outflow since the start of the year, though the exact ranking depends on how you count prior drawdowns. The data, compiled by CoinShares, covers a broad set of publicly listed crypto funds across multiple jurisdictions.
Bitcoin ETFs take the hit
The outflows were concentrated in Bitcoin exchange-traded funds. Those products accounted for the vast majority of the redemptions, reflecting a broad risk-off move among institutional and retail investors alike. The selling was broad-based across issuers, suggesting a coordinated response to external news rather than fund-specific issues.
Altcoins largely unscathed
Altcoin funds, by contrast, held their ground. Funds tracking Ethereum, Solana, and other tokens saw minimal net outflows. Some even recorded small inflows. The divergence suggests that the sell-off was not a blanket rejection of crypto, but a rotation away from Bitcoin exposure amid uncertainty. It also hints that capital stayed within the ecosystem rather than exiting entirely.
What CoinShares points to
CoinShares, in its weekly report, tied the outflows directly to geopolitical developments. No specifics were given, but the timing lines up with renewed tensions in Eastern Europe and trade frictions between the U.S. and China that escalated early last week. Those events rattled global markets broadly, and crypto was not spared. The question now is whether the outflows will persist or prove a one-week blip. The coming weeks' data will show if investors step back in or stay on the sidelines.
