Digital Asset Investment Products See $454M in Net Outflows as Rate Cut Hopes Fade

Digital asset funds posted $454M in net outflows as US investors pulled back amid interest rate uncertainty.

Digital asset investment products faced a sharp reversal in investor demand last week as concerns around US monetary policy weighed on risk appetite. Data shows that recent outflows have erased most of the strong inflows seen at the start of the year, even as interest in select altcoins and new ETF filings points to continued institutional engagement.

Digital Asset Funds Post Fourth Straight Day of Outflows on Macro Concerns

Digital asset investment products recorded $454 million in net outflows over the past week, marking the fourth straight day of withdrawals. Combined outflows for the four-day stretch totaled $1.3 billion, nearly offsetting the $1.5 billion in inflows logged during the first two trading days of the year. 

Investor caution increased after fresh macroeconomic data reduced expectations for a US Federal Reserve interest rate cut in March.

Weekly flow data from CoinShares shows sentiment has weakened beyond a single week. Strong inflow conditions seen through much of mid-2025, when weekly inflows often ranged between $3 billion and $6 billion, have given way to a choppier pattern. Outflows over the past weeks point to a clear pullback in confidence as markets moved into early 2026.

Image Source: CoinShares

Regional data showed a sharp split in the behavior of investors pertaining to digital asset products. United States-based products were the only ones to record net outflows, totaling $569 million for the week. Other regions remained net buyers, led by Germany with $58.9 million in inflows, followed by Canada at $24.5 million and Switzerland at $21 million.

Crypto ETF Market Shows Diverging Trends as Bitcoin Selling Meets Altcoin Demand

Activity among major US digital asset product providers showed mixed results:

• Fidelity led weekly outflows with $454 million in redemptions.
• Grayscale followed with $360 million in outflows.
• iShares recorded $181 million in inflows.
• ProFunds Group added $180 million, while Bitwise saw $47 million in inflows.

Meanwhile, ARK 21Shares and Volatility Shares posted investment withdrawals of $84 million and $74 million, respectively.

Despite the weak weekly performance, month-to-date and year-to-date flows remained positive at $229 million, supported by earlier inflows. Total assets under management across digital asset products stood at $181.9 billion.

ETF products tied to BTC posted the most withdrawals, with weekly outflows touching $405 million. Additionally, short-Bitcoin lost roughly $9.2 million in investments, sparking mixed near-term price directions. 

Image Source: CoinShares

Similar to the OG crypto, Ethereum-based products posted $116 million in outflows, while multi-asset products lost $21 million. At the same time, Binance and Aave products recorded modest losses.

Even so, the overall altcoin ETF market closed the week with relatively strong outings. For example, XRP-focused products attracted $45.8 million, while Solana ETFs pulled in $32.8 million. Sui also joined the weekly winners, raking in $7.6 million in investment.

Digital Assets Face Selling Pressure Amid Global Risk Concerns, Says Kronos CIO

Vincent Liu, chief investment officer at Kronos Research, explained that fading expectations for near-term rate cuts and rising geopolitical risks have triggered investor caution. 

“With Q1 rate cuts looking less likely and geopolitical risks rising, macro conditions have turned risk-off. As traders wait for clearer positive signals, reduced risk appetite is spilling into crypto.”

Vincent Liu said in an interview with CoinTelegraph.

Interestingly, institutional interest has not disappeared, despite the recent negative market trend. Morgan Stanley recently filed with the US Securities and Exchange Commission to launch spot Bitcoin and Solana ETFs. Separately, Bank of America began allowing wealth advisers to recommend exposure to selected Bitcoin ETFs, signaling ongoing long-term interest despite short-term volatility.

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