Investors are rapidly exiting crypto ETPs as market uncertainty intensifies.
Bitcoin faces the harshest sell-off, reflecting widespread risk aversion.
A few alternative assets are drawing interest, signaling potential shifts in market focus.
Broader economic and security concerns are fueling a cautious reallocation from digital assets.
Crypto exchange-traded products (ETPs) saw record outflows of $2.9 billion last week, marking the largest weekly sell-off on record, according to CoinShares.
This marks the third consecutive week of outflows, bringing total withdrawals to $3.8 billion over this period, according to CoinShares’ March 3 report.
Bitcoin Leads Crypto ETP Outflows as Ethereum, Solana, and Ton Take Hits
In a blog post, CoinShares, a leading European crypto investment firm, attributed the mass sell-off to several key factors.
These include the $1.4 billion Bybit hack, hawkish comments from Federal Reserve Chair Jerome Powell, and profit-taking after a 19-week inflow streak that brought in $29 billion.
Record outflows totalling US$3.8bn over the last 3 weeks
Digital asset investment products saw outflows of $2.9bn, with #Bitcoin seeing outflows of $2.59bn last week. #Sui saw inflows of $15.5m, followed by #XRP with inflows of $5m. We can also note that #Ethereum did not… pic.twitter.com/MFKR6VySnc
These factors contributed to investor sell-offs and weakened sentiment in the crypto market.
James Butterfill, head of research at CoinShares, noted that Bitcoin bore the brunt of this negative sentiment, suffering $2.59 billion in outflows last week.
Meanwhile, short Bitcoin ETPs attracted $2.3 million in inflows, reflecting increased bearish bets against Bitcoin.
Ethereum was not spared from the sell-off, recording about $300 million in outflows—the largest weekly outflow in its history.
Crypto ETPs outflow by asset/ Source: CoinShares data as of February 28
CoinShares data as of February 28 also showed that Solana recorded $7.4 million in outflows, while Ton suffered $22.6 million in withdrawals.
However, Sui was the only major crypto ETP to see strong inflows, leading with $15.5 million.
XRP-based ETPs followed closely with $5 million in inflows, signaling selective investor confidence in certain altcoins despite broader market turbulence.
Regional Trends and Historical Context of Crypto ETP Flows
The U.S. led the outflows among crypto ETP asset managers, shedding $2.87 billion.
Switzerland and Canada followed with $73 million and $16.9 million in outflows, respectively.
In contrast, German investors saw the market downturn as a buying opportunity, making the country the only region with substantial inflows exceeding $55 million.
Consequently, total assets under management (AUM) in crypto ETPs dropped to $138.82 billion, down from a historical high of $173 billion in January.
The market surge earlier this year coincided with speculation about a U.S. government crypto reserve following comments attributed to former President Donald Trump.
This is not the first time crypto ETPs have experienced mass outflows.
Bitcoin alone accounted for $11.5 billion in inflows, while Ethereum enjoyed a seven-week streak of $3.5 billion in inflows.
Bitcoin’s Price Reaction and Key Macro Events Ahead
Bitcoin’s price fell sharply following the record ETP outflows, hitting a four-month low of $78,197 on February 28—down 27% from its all-time high of over $109,000.
BREAKING: Bitcoin falls below $88,000 for the first time since November 2024, officially enters bear market territory.
However, Bitcoin bulls mounted a strong recovery, with BTC/USD surging by $10,000 in a single day to trade in the $93,000 range.
This resurgence followed former President Donald Trump’s apparent confirmation of the proposed strategic crypto reserve, shifting market sentiment toward long-term recovery prospects.
Upcoming macroeconomic events could add further volatility to the crypto market.
Investors will be watching key U.S. employment data, including jobless claims on March 6 and the jobs report on March 7, for signals on economic health.
Federal Reserve Chair Jerome Powell’s speech later this week may also provide guidance on future monetary policy, shaping sentiment across risk assets, including cryptocurrencies.
Frequently Asked Questions (FAQs)
What are the deeper factors driving the current outflows in crypto ETPs?
Investors cite rising economic uncertainty, shifting regulatory views, and cybersecurity issues as key reasons for the outflow. Heightened risk and evolving asset strategies prompt a reallocation from crypto ETPs.
How might these outflows influence the broader cryptocurrency market?
The retreat from ETPs could trigger lower liquidity and increased volatility across digital asset markets. Reduced institutional backing may amplify price swings and shift investor focus to alternative tokens.
What might the resilience in select altcoins indicate for future trends?
The inflows into certain altcoins indicate investors are seeking diversification amid stress. This selective interest may signal a shift toward assets viewed as offering stronger growth and stability.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 
Record outflows totalling US$3.8bn over the last 3 weeks
