Digital Asset ETPs See 4th Week of Outflows Amid Regional Divergence

Digital asset investment products experienced their fourth consecutive week of net outflows, totalling US$173M. This extends the four-week outflow streak to US$3.74B, reflecting continued market uncertainty among institutional investors.

Market Dynamics

The week showed notable intra-week volatility. Monday began positively with US$575M in inflows, but mid-week price weakness triggered US$853M in outflows. Sentiment improved on Friday following weaker-than-expected CPI data, generating US$105M in inflows. ETP  trading volumes declined significantly to US$27B from the previous week’s record US$63B.

A sharp regional divergence emerged between US and international investors. US-based products saw US$403M in outflows, while European and Canadian products attracted US$230M in inflows. Germany led with US$115M, followed by Canada at US$46.3M and Switzerland at US$36.8M. This suggests differing sentiment levels across markets.

Asset-Specific Flows

Bitcoin products recorded US$133M in outflows, representing the weakest sentiment among major assets. Interestingly, short Bitcoin products also saw outflows totalling US$15.4M over two weeks—a pattern historically associated with market lows. Ethereum products experienced US$85.1M in outflows.

Conversely, alternative assets showed resilience. XRP attracted US$33.4M, Solana drew US$31M, and Chainlink saw US$1.1M in fresh inflows, indicating selective investor interest in specific protocols.

Portfolio Implications

For advisors maintaining strategic digital asset allocations, these flows suggest a period of consolidation rather than capitulation. The pattern of outflows from short positions alongside long positions historically signals proximity to market bottoms. Regional divergence indicates that US-specific factors may be driving sentiment rather than fundamental digital asset dynamics.

Advisors using a 5% Bitcoin allocation model, as suggested by CoinShares’ Research, should view this period as normal volatility within a strategic position. The selective strength in alternative assets suggests opportunity for tactical rebalancing, though maintaining core Bitcoin exposure remains appropriate for long-term portfolio construction.

Past performance is not indicative of future results. Digital assets remain volatile and should represent only a portion of diversified portfolios appropriate to each client’s risk tolerance and investment objectives.

For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.

Check out the newsletter advisors rely on