Crypto ETPs see $2.9B outflow amid Bitcoin decline
Cryptocurrency exchange-traded products (ETPs) experienced a record-breaking weekly outflow of $2.9 billion, marking the largest sell-off in history, according to CoinShares.
This significant withdrawal extends a three-week streak of outflows, totaling $3.8 billion.
The outflows were largely driven by Bitcoin (CRYPTO:BTC), which saw $2.6 billion in withdrawals, making it the hardest hit among all cryptocurrencies.
Other assets like Ethereum (CRYPTO:ETH) also faced substantial outflows, with $300 million leaving its ETPs.
Several factors contributed to this trend, including the $1.5 billion Bybit hack, the increasingly hawkish stance of the U.S. Federal Reserve, and profit-taking following a 19-week inflow streak of $29 billion.
"These elements likely led to a mix of profit-taking and weakened sentiment toward the asset class," CoinShares research head James Butterfill noted.
Not all assets suffered outflows; Sui (CRYPTO:SUI) and XRP (CRYPTO:XRP) were among the few to see inflows, with $15.5 million and $5 million, respectively.
BlackRock’s iShares Bitcoin Trust faced the largest outflows at $1.3 billion, marking a significant shift in investor sentiment.
The total assets under management (AUM) in crypto ETPs have dropped to $138.8 billion from a high of $173 billion in January.
Despite these outflows, some ETFs like ProShares continued to attract inflows, posting $76 million last week.
"This tells me the hedge funds are starting to unwind their basis trade position, which is a net neutral position," James Van Straten, an analyst at CoinDesk, observed, indicating a potential reallocation of capital away from Bitcoin derivatives.
The recent sell-off has left investors questioning whether institutional interest will return to crypto ETPs in the coming weeks.
At the time of reporting, the Bitcoin (BTC) price was $85,954.03.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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