Cryptocurrency investment products posted heavy outflows last week as investors reduced risk amid inflation fears and uncertainty over a lasting ceasefire between the United States and Iran.

According to CoinShares’ latest weekly report, digital asset exchange-traded products (ETPs) recorded $1.07 billion in net outflows, ending a six-week streak of inflows. It marked the third-largest weekly outflow this year.

Bitcoin (BTC) investment products accounted for the bulk of the withdrawals, with $982 million in outflows. Ether (ETH) products lost $249 million, their largest outflow since the week ending Jan. 30.

Altcoin funds bucked the broader trend. XRP (XRP) investment products drew in $67.5 million, while Solana (SOL) funds added inflows of $55.1 million.

Despite last week’s outflows, both Bitcoin and Ether ETPs remain firmly positive on a year-to-date basis. Source: CoinShares

Most of the outflows originated in the United States, where investors pulled net $1.14 billion from funds. In contrast, several European markets, including Switzerland, Germany and the Netherlands, posted modest inflows.

The pullback in crypto funds coincided with a broader retreat in risk assets, with the S&P 500 index falling from all-time highs late last week. Investors remained focused on disruptions around the Strait of Hormuz, a critical shipping route for global oil supplies, which have pushed energy prices higher and contributed to a renewed rise in US inflation to its highest level in more than three years.

Related: Crypto’s CLARITY Act faces partisan fight over ethics on Senate floor

CLARITY Act remains a source of hope for crypto industry

CoinShares head of research James Butterfill said select altcoins benefited from improving regulatory sentiment in the United States following progress on the CLARITY Act.

The legislation, which would establish a clearer framework for regulating digital assets in the US, advanced out of the Senate Banking Committee last week with bipartisan support.

Industry advocates say the bill could reduce regulatory uncertainty and provide a more predictable legal environment, encouraging crypto companies and investment to remain in the US.

Crypto Council for Innovation CEO Ji Hun Kim said “the momentum and progress are both strong” as the legislation moves through Congress.

Source: Faryar Shirzad

However, several Senate Democrats have pushed for stronger ethics provisions, particularly concerning elected officials’ financial ties to the crypto industry.

Republican Senator Thom Tillis said “more work remains in the weeks ahead to make this legislation even better.”

Related: Ethics remain sticking point as crypto market structure bill goes to markup

AEON raised $8m led by YZi Labs to build an AI-native settlement layer, using its x402 protocol on BNB Chain to let agents pay 50m+ merchants via on-chain receipts.

AEON has completed an $8 million pre-seed funding round to build what it calls the “financial foundation of the AI economy,” with Binance venture arm YZi Labs leading the round alongside IDG Capital, HashKey Capital, Stanford Blockchain Builders Fund, Oak Grove Ventures, and other backers. According to a ChainCatcher-summary of reporting from The Block, the company did not disclose its valuation, but said the capital will be used to develop settlement infrastructure that allows autonomous AI agents to exchange value directly with each other and with real-world merchants.

YZi Labs backs “financial foundation of the AI economy”

In a statement cited in KuCoin’s flash update, AEON said the goal is to create an AI-native payments fabric that supports “high-frequency microtransactions, on-chain agent identity, and global fiat settlement” so that AI systems can plug into commerce without human intermediaries. PANews added that the team is explicitly targeting the “agentic economy,” positioning the protocol as a back-end layer that can be embedded into AI assistants, bots, and services that need to pay for APIs, subscriptions, or real-world goods.

AEON launched its first AI payment product in May, enabling AI agents to connect with more than 50 million physical merchants globally through integrations with existing payments partners. The company claims this lets agents route payments at point of sale, handle subscriptions, and settle online transactions while abstracting away blockchain complexity from end users and merchants.

x402 turns HTTP into an on-chain payment rail

A key part of AEON’s stack is its x402 protocol, which repurposes the long-ignored “402 Payment Required” HTTP status code into a programmable payment step for AI agents executing web-based actions. In an earlier press release, the company explained that x402 allows agents to “independently execute online transactions by embedding payments directly into standard HTTP interactions,” so that an agent can receive a 402 response, pay in stablecoins, and unlock access with no human in the loop.

Built on top of that protocol, the newly announced x402 Facilitator is deployed natively on BNB Chain and adds verifiable transactions, on-chain settlement, and immutable receipts to each agent-driven payment. Every x402 transaction is validated by the Facilitator for “payload authenticity and mandate compliance” before being finalized on BNB Chain, generating a tamper-proof on-chain receipt that includes the agent’s ERC-8004-compliant identity for auditing and reconciliation.

AEON says the BNB Chain integration gives its system the scalability and transparency needed for production-level AI-to-merchant commerce, allowing agents to interact with “millions of service providers across the BNB ecosystem” and execute payments that are “fast, transparent, and verifiable in real time.” Combined with the fresh $8 million round led by YZi Labs, the launch signals growing institutional conviction that an agent-specific settlement layer will be a core piece of infrastructure as AI systems start to transact on behalf of users and enterprises.

Ether (ETH) dropped sharply after rejection at $2,400 last week, dropping as low as $2,100 on Monday, indicating that bears are back “in control,” according to new analysis.

Key takeaways:

• Ether drops 12% after rejection at $2,400 as bears regain control.
• Binance sell pressure and ETF outflows signal weak ETH demand.
• Analysts warn ETH/USD could fall toward $1,700 if support at $2,000 breaks.

ETH bears selling aggressively

Data from TradingView shows ETH price trading at $2,100, down 12% below its local high of $2,420 reached on May 6. On Sunday, ETH/USD hit $2,090 on Bitstamp, its lowest level since April 17.

ETH/USD one-hour chart. Source: Cointelegraph/TradingView

The bearish sentiment could be returning to Ether’s market as a key metric from Binance, the largest crypto exchange by trading volume, shows that sellers are starting to dominate the platform’s volumes.

Related: Surging oil prices have been driving Ether selling pressure: Tom Lee

The Binance taker buy volume, which measures the total dollar amount of aggressive sell orders placed by traders on Binance futures, climbed above $1.1 billion within an hour on Sunday as ETH moved toward levels below $2,100. 

When this metric spikes during price declines, it often points to forced de-risking or strong short-term bearish pressure from active market participants.

Ether saw “large aggressive sell-volume spikes on Binance while testing important downside levels,” CryptoQuant analyst Amr Taha said in a QuickTake note on Monday, adding:

“This does not necessarily confirm the start of a deeper downtrend. However, it shows that sellers were clearly in control during the move.”

ETH taker sell volume on Binance. Source: CryptoQuant

Increasing outflows from ETH investment products added to the sell-side pressure.

Data from SoSoValue shows US-based spot Ethereum ETFs had net outflows for five consecutive days, totalling $255 million. 

This suggests that “institutional momentum has hit a localized wall for Ethereum,” analyst Whale Factor said in a Sunday post, adding:

“This heavy sell-side distribution is keeping a tight lid on prices for now. ”

Spot ETH ETF flows chart. Source: SoSoValue

Global Ethereum investment products also saw $249 million in outflows during the week ending May 15, the largest since Jan. 30, data from CoinShares shows.  

3.5 million ETH cluster at $2,000 could abate a sell-off

According to Ether’s cost-basis distribution data, investors hold approximately 3.85 million ETH at an average cost basis of $2,000-$2,100, creating a potential support zone. This concentration suggests many investors may add to their positions at break-even, potentially abating another ETH price breakdown.

Ethereum cost basis distribution chart. Source: Glassnode

As Cointelegraph reported, the ETH price could potentially drop toward $1,700 after validating a rising wedge pattern on the daily time frame. Traders, however, say the bearish momentum could be stalled if ETH/USD holds above $2,000.

“$ETH dropped below $2,100 as it failed to hold the $2,150 support zone,” said crypto analyst Ted Pillows in an X post on Tuesday, adding:

“The next key support for Ethereum is the $2,050-$2,070 level, which could provide some bounce back.”

ETH/USD daily chart. Source: X/Ted Pillows

Technical analyst Donald Dean said ETH bulls need to defend the “lower volume shelf support near $2,100” to avoid a move below a rising channel on the daily chart.

ETH/USD daily chart. Source: X/Donald Dean

Fellow analyst Cryptorphic said if the ETH/USD pair fails to “hold this area and consolidates below it, we could see a continuation toward lower support levels,” adding:

“The recent breakdown below the local support area shows that buyers are getting weaker in the short term.”

Meanwhile, Sharplink CEO pointed out three catalysts that the ETH price needs to surge higher, including the passage of the CLARITY Act in the US, a return of marketwide risk appetite, and growth in real-world asset tokenization on Ethereum.

Key Highlights

• Payward achieves $507M in Q1 revenue while market speculation grows around Kraken’s IPO delay.

• Revenue climbs 3% year-over-year for Kraken’s parent despite challenging crypto market conditions.

• EBITDA margins compress at Payward as Kraken invests heavily in acquisitions and product development.

• Strategic expansion moves Kraken into equities trading, derivatives, payment solutions, and tokenized assets.

• Public listing timeline for Payward draws scrutiny as valuation estimates decline throughout 2026.

Payward disclosed adjusted revenue of $507 million for the first quarter of 2026, maintaining momentum despite significant cryptocurrency market headwinds. The parent organization of Kraken achieved 3% revenue expansion year-over-year while industry-wide trading participation declined substantially. These financial results emerged alongside speculation regarding a potential postponement of the company’s initial public offering until 2027.

Kraken Parent Maintains Revenue Growth Despite Industry Slowdown

The exchange platform processed $357 billion in aggregate transaction volume throughout the three-month period. Cryptocurrency trading momentum decelerated as macroeconomic headwinds and international tensions dampened market sentiment. Bitcoin’s value declined 22%, while the overall digital asset market capitalization contracted 23% during this timeframe.

Despite challenging market conditions, Kraken captured increased market share in spot trading activities. The platform’s portion of spot volume expanded from approximately 3.5% in mid-2025 to reach 5.2% by March 2026. Additionally, Payward maintained 59% of its spot trading volume measured from the December 2024 high-water mark, demonstrating superior resilience compared to major competitors.

Adjusted EBITDA declined to $18 million from $168 million recorded in the prior-year quarter. Payward attributed this reduction to ongoing investments across product development, strategic acquisitions, regulatory compliance initiatives, and customer base expansion. While maintaining profitability, the organization prioritized long-term growth initiatives over immediate margin optimization.

Strategic Acquisitions Drive Platform Diversification Beyond Digital Assets

Through targeted acquisitions, Payward constructed a comprehensive multi-asset infrastructure platform. The Backed acquisition enables tokenized equity offerings, while Magna delivers token lifecycle management capabilities for issuers and blockchain protocols. Bitnomial enhances US-based derivatives operations, and the anticipated Reap closing adds payment processing and card infrastructure functionality.

Consumer product offerings expanded significantly during the opening quarter. The platform introduced US stock and ETF trading through Kraken Desktop while launching traditional finance futures for European Union customers. Additional rollouts included dual investment products, enhanced margin trading pairs, DeFi Earn capabilities, and Kraken CLI for command-line execution.

These product initiatives demonstrate Payward’s strategic pivot beyond cryptocurrency spot trading. NinjaTrader integration, Breakout features, and broadened futures access contributed to a 51% year-over-year increase in average daily futures revenue trades. Consequently, Payward diversified revenue generation away from direct cryptocurrency price correlation.

Public Offering Timeline Uncertainty Grows Amid Valuation Fluctuations

Following a November funding round at a $20 billion valuation, Payward submitted confidential IPO registration documents. Subsequent market reports indicated a reduced implied valuation after Deutsche Börse’s $200 million strategic investment. That transaction reportedly established Kraken’s fully diluted valuation near $13.3 billion.

The public listing schedule now faces intensified market examination following reports suggesting potential postponement into 2027. This timeline adjustment follows cryptocurrency price declines, diminished trading volumes, and downward pressure on exchange sector valuations. Payward reportedly reduced headcount by 150 positions last week as part of operational cost optimization efforts.

Since its 2011 inception, Kraken has established itself among the cryptocurrency industry’s most enduring exchange platforms. Its parent organization now positions itself as a diversified infrastructure provider spanning digital assets, equities, derivatives, payments, and tokenization services. The first-quarter financial disclosure reveals an organization sustaining revenue growth while navigating preparation for public market transparency requirements.