Nearly $1 billion flowed out of cryptocurrency investment funds last week, marking a sharp reversal after three consecutive weeks of positive inflows. According to data from CoinShares, the net outflows totaled $952 million, driven primarily by renewed regulatory uncertainty in the United States. Officials confirmed that the US Digital Asset Market Clarity Act will not reach the Senate until January 2026, weighing heavily on investor sentiment.
Ethereum-focused funds led the decline with $555 million in outflows, followed by Bitcoin products which saw $460 million exit. This pullback reflects a broader market recalibration as regulated capital reassesses risk following October's market crash, which erased approximately $1.3 trillion from global crypto valuations.
Amid this backdrop, attention is shifting toward early-stage projects and platforms demonstrating tangible utility. Exchange OKX reported a 53-fold surge in regulated trading activity after expanding into the US and EU, signaling strong institutional appetite for compliant infrastructure. Meanwhile, the synthetic stablecoin USDe, issued by Ethena, has seen its market capitalization plummet by over $8 billion since October, falling from above $14 billion to around $6.4 billion, highlighting the fragility of certain crypto-economic structures.
A significant focus is now on AI-integrated crypto projects. DeepSnitch AI, an operational AI surveillance platform, has raised over $879,000 in its presale, with its DSNT token price at $0.02961. The project has surged 96% during its presale and is on pace to hit $1 million raised by year-end. The platform, which offers real-time tracking of whale movements, sentiment analysis, and on-chain risk profiling, is scheduled for launch in January 2026, with analysts speculating about potential Tier 1 exchange listings.
Established layer-1 networks are facing their own challenges. Cardano's ADA token fell 4% to test key support around $0.36, breaking below the critical $0.38 Fibonacci level. Despite the price pressure, Cardano recently launched Starstream, enabling cross-chain smart contracts with its privacy-focused chain, Midnight. Avalanche's AVAX also declined 3% to around $12, facing rejection at a key resistance level. While VanEck has amended its spot AVAX ETF proposal to include staking rewards, a proposed 4% service fee and SEC delays pushing a decision to July 2026 have cooled near-term enthusiasm.
The market shakeout is creating a clear divergence: capital is flowing away from assets clouded by regulatory uncertainty and toward platforms with working products and clear utility. As macroeconomic conditions evolve—with the Federal Reserve widely expected to cut rates and liquidity building from Asia—the convergence of AI and cryptocurrency is emerging as a dominant theme for the next market cycle.
