**Crypto Investment Products Experience Notable Outflows Amid Market Caution**
Last week, global crypto investment products experienced net outflows of $508 million, bringing the total decline over the past two weeks to $924 million. Bitcoin saw the largest withdrawals, while XRP, Solana, and Ethereum managed to attract inflows despite the prevailing market caution. For the second consecutive week, institutional crypto fund products from major players like Fidelity, BlackRock, and Grayscale faced significant outflows. According to CoinShares, redemptions totaled $508 million, following the previous week’s outflows of $416 million. This recent trend contrasts sharply with the 18 weeks of inflows that saw a total of $29 billion enter the market. Analysts suggest that this downturn is largely due to investor caution amid economic uncertainties.
The recent U.S. presidential inauguration has sparked concerns over potential trade tariffs, inflation, and shifts in monetary policy. This cautious sentiment is reflected in the trading volume, which plummeted to $13 billion last week, down from $22 billion just two weeks prior. Regionally, the U.S. accounted for the majority of withdrawals, with $560 million leaving the market. In contrast, Europe continued to see inflows, with Germany and Switzerland receiving $30.5 million and $15.8 million, respectively.
Bitcoin faced a significant hit, reporting $571 million in redemptions, while short Bitcoin products saw a modest inflow of $2.8 million. This trend indicates a waning confidence in Bitcoin’s short-term prospects amid weakening market momentum. However, altcoins displayed a different narrative. XRP emerged as the leading gainer, attracting $38.3 million in inflows, continuing its accumulation pattern that began in mid-November. The sustained interest in XRP appears to be fueled by speculation that the SEC may ultimately lose its case against Ripple.
Other altcoins also enjoyed strong inflows, with Solana attracting $8.9 million, Ethereum seeing $3.7 million, and Sui garnering $1.47 million. This consistent interest in altcoins highlights investors’ desire to diversify their portfolios, even in the face of an overall market decline.
On-chain data indicates a decline in Bitcoin activity, contributing to the dip in market sentiment. According to Alphractal, the 90-day active supply—a key indicator of demand for Bitcoin—is on the decline. This metric tracks the amount of Bitcoin that has been transacted at least once in the last 90 days, serving as a gauge for new investor interest. Historically, a decrease in this figure suggests that fewer newcomers are entering the market. If this trend persists, Bitcoin may face either price consolidation or further declines. CryptoQuant has also noted a decrease in activity on the Bitcoin network, reinforcing these observations.
