Crypto ETPs See Record $2.9B Outflows Amid Market Uncertainty

Crypto exchange-traded products (ETPs) experienced their largest-ever weekly sell-off, with investors withdrawing $2.9 billion, according to CoinShares. This marks a sharp reversal after 19 consecutive weeks of inflows, reflecting growing uncertainty in the digital asset market.

The latest outflows extend a three-week streak, now totaling $3.8 billion. CoinShares analyst James Butterfill attributes the sell-off to several factors, including investor concerns following the recent $1.5 billion hack on Bybit and the Federal Reserve’s hawkish monetary stance.

Bitcoin (BTC) bore the brunt of the losses, seeing $2.6 billion in outflows. Meanwhile, short Bitcoin ETPs attracted a modest $2.3 million, suggesting bearish sentiment has yet to take hold fully. Some altcoins, however, defied the trend—Sui (SUI) led with $15.5 million in inflows, followed by XRP.

Spot Bitcoin ETFs also struggled, with BlackRock’s iShares Bitcoin Trust (IBIT) suffering a record $1.3 billion in outflows. Institutional positioning in Bitcoin futures declined as well, with CME Bitcoin futures open interest dropping from 170,000 BTC to 140,000 BTC in two weeks. The three-month futures annualized rolling basis yield now stands at 7%, only slightly higher than the 4% offered by short-term U.S. Treasuries, making the trade less appealing.

Analyst James Van Straten noted that hedge funds may be unwinding their basis trade positions, reallocating capital toward safer assets. As macroeconomic uncertainty looms, crypto markets may face continued volatility in the coming weeks.