Digital asset investment products recorded a significant $454 million in net outflows last week, according to data from CoinShares. This marks a sharp reversal in investor sentiment, nearly erasing the $1.5 billion of inflows recorded during the first two trading days of 2026. The outflows extended a four-day streak of withdrawals totaling $1.3 billion.
The abrupt shift is closely tied to cooling expectations for a U.S. Federal Reserve interest rate cut in March. Recent macroeconomic data, suggesting persistent inflation and a firm labor market, has prompted a risk-off behavior among investors. James Butterfill of CoinShares noted the turnaround "appears to stem mainly from investor worries over the diminishing prospects of a Federal Reserve interest rate cut in March."
Regionally, the United States dominated the outflows, with $569 million withdrawn from US-listed products. This contrasted sharply with sentiment in Europe and Canada. Germany led inflows with $58.9 million, followed by Canada ($24.5 million) and Switzerland ($21 million).
At the asset level, Bitcoin (BTC) experienced the largest outflows, shedding $405 million over the week. Interestingly, short-Bitcoin products also saw $9.2 million in outflows, indicating mixed conviction rather than a clear bearish bet. Ethereum (ETH) followed with $116 million in outflows.
Multi-asset products recorded $21 million in withdrawals, while funds linked to Binance and Aave saw smaller outflows of $3.7 million and $1.7 million, respectively. Despite the broader retreat, select altcoins attracted fresh capital. XRP led inflows with $45.8 million, followed by Solana (SOL) at $32.8 million and Sui (SUI) at $7.6 million, pointing to selective investor positioning.
Major institutional players showed divergent flows. BlackRock's iShares products and Profunds Group led weekly inflows with $181 million and $180 million, respectively. In contrast, Fidelity and Grayscale accounted for significant outflows of $454 million and $360 million. Despite the weekly losses, total assets under management in crypto ETPs rose slightly to $181.9 billion.
