Crypto Investment Products See Wild Swings: $619M Weekly Inflow Erased by $829M Two-Day Outflow

Cryptocurrency investment products started strong last week, attracting $1.44 billion in inflows during the first three trading days. However, a sudden reversal on Thursday and Friday saw institutional investors pull out nearly $830 million in just two days, resulting in a final weekly net inflow of only $619 million, far below Wednesday's expectations. This reversal was not due to increased geopolitical tensions, but rather to changes in the macroeconomic environment. CoinShares analysis indicates that the initial inflows were indeed driven by the situation in Iran, with the market viewing digital assets as safe havens. However, as rising oil prices fueled inflation concerns and market expectations for interest rate paths adjusted, risk assets generally came under pressure, and crypto assets were no exception. Geographically, the U.S. market was the only region with net inflows, absorbing $646 million for the week, almost offsetting all outflows from other regions. Europe, Canada, and Hong Kong all recorded outflows, with Germany, the largest crypto ETP market in Europe, seeing outflows of $14.8 million for the week.

At the product provider level, BlackRock's iShares led the way with a net inflow of $808 million for the week, becoming the largest recipient of funds. Grayscale and Bitwise received inflows of $109 million and $25 million, respectively. In contrast, Fidelity saw outflows of $359 million for the week, continuing its year-to-date net withdrawal trend of $1.418 billion, making it the largest outflow provider during the period. ARK 21Shares has seen cumulative outflows of $219 million this year. The stark contrast between iShares' continued accumulation and Fidelity's continued reduction constitutes the most significant structural divergence in current institutional fund flows.

In terms of assets, Bitcoin accounted for 84% of total inflows with a weekly inflow of $521 million, showing strong performance. Ethereum saw inflows of $88.5 million, and Solana saw inflows of $14.6 million. Notably, short Bitcoin products also attracted $11.4 million, suggesting that some institutions have begun to hedge against short-term downside risks. XRP, on the other hand, experienced outflows of $30.3 million, echoing the latest data from Glassnode: currently, 36.8 billion XRP are in a state of unrealized loss, with cumulative losses of up to $50.8 billion. The dual indication of on-chain data and product fund flows reinforces the market's judgment of a short-term bearish sentiment towards XRP.

Although Ethereum recorded positive inflows for the week, its cumulative net outflow since the beginning of the year has reached $340 million, indicating that its long-term capital attraction still faces challenges. Short-term rebounds cannot hide structural redemption pressures, and market consensus on ETH is still in the recovery phase.