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Real Reason Why Bitcoin and Ethereum ETFs are Bleeding Now

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Real Reason Why Bitcoin and Ethereum ETFs are Bleeding Now

The US Spot Bitcoin and Ethereum ETFs are seeing sustained outflows as investors rotate capital into international equities. Both crypto ETFs have seen only 2 weeks of positive inflows so far in 2026.

The shift comes amid rising Treasury yields, a resilient US labor market, and record inflows into global ex-US stock funds.

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Money is Shifting to International ETF Markets

Over the past several weeks, US spot Bitcoin ETFs have moved into clear net outflow territory. Total assets have dropped sharply from recent highs near $115 billion to roughly $83 billion. 

Ethereum ETFs show an even steeper contraction, with assets declining from around $18 billion to near $11 billion.

This is not random volatility. It reflects capital leaving the asset class.

US Bitcoin ETFs Weekly Inflow In 2026. Source: SoSoValue

At the same time, international equity ETFs recorded their strongest inflows in years. 

January saw record allocations into global ex-US funds, which absorbed roughly one-third of total ETF inflows despite representing a much smaller share of total assets.

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That signals major rotation.

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Institutional investors appear to be trimming exposure to crowded US growth trades — including crypto — and reallocating to cheaper overseas markets amid improving macro conditions abroad.

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Meanwhile, stronger US jobs data pushed Treasury yields higher. Higher yields tighten financial conditions and increase the attractiveness of bonds relative to risk assets. 

Bitcoin and Ethereum, which trade as high-beta liquidity plays, tend to weaken when capital moves toward safer or yield-generating assets.

The combination creates a structural headwind.

International ETF Market Net Flow Over the Past Year. Source: ETF Trends

Crypto ETFs were a major source of demand in 2024, amplifying upward price moves through sustained inflows. 

Now that mechanism is reversing. Instead of reinforcing rallies, ETFs are acting as distribution channels.

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This does not invalidate the long-term crypto thesis. However, it weakens the short-term liquidity backdrop.

Until capital rotation slows or macro conditions ease, ETF outflows may continue to weigh on Bitcoin, Ethereum, and the broader crypto market.

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Crypto World

Crypto Scam Leader Extradited to China to Face Charges

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Crypto Scam Leader Extradited to China to Face Charges

Li Xiong, a key member of a group that allegedly helped crypto scam rings in Asia to move money, has been extradited from Cambodia to China, where he will face fraud and money laundering charges, according to Hong Kong-based news outlet Ta Kung Wen Wei.

On April 1, with strong support from the relevant authorities in Cambodia, a task force sent by China’s Ministry of Public Security successfully escorted Li Xiong, a core key member of the Chen Zhi criminal syndicate, back to China from Phnom Penh, Cambodia,” it said on Wednesday, citing a statement from China’s Ministry of Public Security on WeChat.

Xiong previously served as chairman of Huione Group, an alleged criminal organization that served scam centers in Cambodia that carried out “pig butchering” scams and other investment schemes to steal crypto from victims around the world. 

Huione Group was responsible for one of the largest illicit online marketplaces in the world, handling over $89 billion in cryptoassets.

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Source: Jacob in Cambodia

His extradition comes three months after the arrest of Chen Zhi, the head of Prince Group, which operates Huione Group. In October, it was reported that the US Department of Justice seized 127,271 Bitcoin (BTC) worth more than $15 billion from Zhi.

Related: Hong Kong retiree loses $840K in triple ‘crypto expert’ scam

The US Treasury Department’s Financial Crimes Enforcement Network directed US banks to cut payments and accounts tied to the Huione Group in October.

Authorities ask other Huione members to surrender

Ta Kung Wen Wei noted that several other members of Zhi’s criminal syndicate have been brought to justice “one after another,” citing comments from Chinese public officials.

“Public security authorities will continue to intensify efforts to capture fugitives,” it said, adding:

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“At the same time, they once again warn criminals to recognize the situation, stop before it is too late, surrender as soon as possible, and strive for lenient treatment.”

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