Crypto Funds See $1B Outflows as Iran Tensions Rise

TLDR

• Crypto funds recorded $1.07 billion in net outflows, ending a six-week streak of inflows.
• Bitcoin products led withdrawals with $982 million in outflows during the week.
• Ether funds posted $249 million in outflows, the largest since late January.
• XRP and Solana investment products attracted fresh inflows despite broader market weakness.
• US-based funds accounted for $1.14 billion of total outflows from crypto products.

Crypto investment products reversed course last week as investors reduced exposure to risk assets. CoinShares reported $1.07 billion in net outflows from digital asset exchange-traded products. The withdrawals ended a six-week inflow streak and marked the third-largest weekly exit this year.

Bitcoin and Ether lead Crypto funds retreat

Bitcoin investment products drove most of the weekly redemptions across global markets. Investors withdrew $982 million from Bitcoin funds, according to CoinShares. The pullback concentrated largely in United States-listed products.

Ether products also faced heavy selling during the same period. Funds tied to Ether recorded $249 million in outflows. That figure represented the largest weekly exit since the week ending January 30.

Most withdrawals originated in the United States, which posted $1.14 billion in net outflows. Meanwhile, Switzerland, Germany, and the Netherlands recorded modest inflows. The shift followed a broader decline in the S&P 500 from recent record levels.

Energy market disruptions near the Strait of Hormuz pushed oil prices higher last week. Rising energy costs contributed to a renewed increase in US inflation. Official data showed inflation reached its highest level in more than three years.

XRP and Solana attract inflows as regulation advances

While major tokens fell, select altcoins attracted fresh capital during the week. XRP investment products brought in $67.5 million in net inflows. Solana funds followed with $55.1 million in new allocations.

CoinShares head of research James Butterfill linked the flows to US policy developments. He said select altcoins benefited from improving regulatory sentiment. Butterfill cited progress on the CLARITY Act as a supportive factor.

The Senate Banking Committee advanced the CLARITY Act with bipartisan backing last week. Lawmakers designed the bill to establish clearer oversight for digital assets. Industry groups argue that the framework would reduce regulatory uncertainty in the United States.

Crypto Council for Innovation CEO Ji Hun Kim addressed the bill’s movement. He said, “The momentum and progress are both strong” as lawmakers review the legislation. However, several Senate Democrats requested stronger ethics provisions tied to officials’ crypto holdings.

Republican Senator Thom Tillis also commented on the draft legislation. He said, “more work remains in the weeks ahead to make this legislation even better.” Lawmakers continue discussions as the bill moves through Congress.