Digital asset investment products recorded their first week of outflows after five consecutive weeks of inflows, with a net withdrawal of $414 million according to the latest data from CoinShares. The shift is attributed to growing investor caution stemming from geopolitical tensions, particularly the Iran conflict, and renewed concerns about inflation.
Market expectations for the upcoming June FOMC meeting have shifted dramatically, with sentiment moving from anticipating interest rate cuts to pricing in potential rate hikes. This change has contributed to a decline in total assets under management (AuM) to $129 billion, a level last seen in early February and around April 2025.
Ethereum (ETH) bore the brunt of the negative sentiment, experiencing outflows of $222 million for the week. This pushed its year-to-date net flows into negative territory at a loss of $273 million, marking the poorest performance among major digital assets. Bitcoin (BTC) also saw significant outflows of $194 million, though it maintains a net positive inflow of $964 million for the year so far. Short-Bitcoin products saw a small inflow of $4 million.
In a notable contrast, XRP (XRP) stood out by attracting $15.8 million in inflows. Other assets like Chainlink (LINK) and Stellar (XLM) recorded modest gains of $0.2 million each. Solana (SOL) faced outflows of $12.3 million, while Sui (SUI) saw a minor $0.4 million withdrawal. Multi-asset products also experienced outflows of $4.4 million.
Regionally, the United States led the outflows with $445 million removed from digital asset products. Switzerland, Sweden, and Hong Kong also saw smaller reductions. Conversely, Germany and Canada capitalized on lower prices, welcoming inflows of $21.2 million and $15.9 million, respectively. Brazil also bucked the trend with a $2.6 million inflow.
Analysts from QCP Capital note that Bitcoin's price action is likely to remain range-bound between $65,000 and $70,000 in the near term, exhibiting a pattern of weekend dips followed by weekly recoveries. Despite outperforming gold and major equities since the onset of the Iran conflict, overall market conviction remains fragile. Bitcoin is on track for its sixth consecutive monthly decline and its first three-month losing streak of the year. A stronger catalyst will be needed for a meaningful breakout, especially after recent selling pressure following quarterly options expiry. The firm expects sideways movement to persist at least until early April, coinciding with a crucial US deadline regarding potential military action against Iran.
