Crypto Investment Products Experience $1.17B in Weekly Outflows as Altcoins Show Strength
The cryptocurrency investment market has faced a significant downturn for the second consecutive week, with crypto exchange-traded products (ETPs) seeing an outflow of $1.17 billion. This marks a sharp increase from the $360 million withdrawn the previous week, pushing the total two-week outflows to approximately $1.5 billion. As a result, assets under management (AUM) in crypto ETPs have declined to $207.5 billion — a level not seen since mid-July, and a stark drop from the $254 billion peak recorded in early October.
The persistent outflows largely reflect the ongoing bearish sentiment in the broader crypto market. According to James Butterfill, head of research at CoinShares, the market has been reacting negatively since a flash crash on October 10. Additionally, investor uncertainty surrounding the potential for a U.S. interest rate cut in December has contributed to the cautious sentiment.
Despite the sell-offs, trading activity in crypto ETPs remained elevated, with weekly volumes reaching $43 billion. A brief midweek rebound occurred on Thursday amid optimism around a possible resolution to the U.S. government shutdown. However, hopes quickly faded, and outflows resumed by Friday.
Bitcoin ETPs remained the primary contributor to the decline, shedding $932 million last week. While slightly lower than the $946 million withdrawn the week prior, the continued capital flight from Bitcoin highlights the waning investor confidence in the leading cryptocurrency’s short-term prospects.
Ethereum (ETH), which had shown signs of resilience the previous week with $57 million in inflows, failed to maintain momentum. Ether-focused funds recorded a substantial $438 million in outflows, further underlining the widespread retreat from major assets.
In contrast to Bitcoin and Ethereum, some altcoins demonstrated notable resilience. Solana (SOL) stood out with $118 million in inflows last week, continuing its impressive streak. Over the past nine weeks, Solana ETPs have attracted a cumulative $2.1 billion, signaling strong investor interest despite the broader market weakness.
Other alternative cryptocurrencies also saw modest inflows. XRP attracted $28 million, Hedera (HBAR) received $27 million, and Hyperliquid (HYPE) brought in $4.2 million. These figures suggest that investors are selectively rotating capital into altcoins with perceived growth potential or lower correlation to Bitcoin.
Interestingly, Short Bitcoin ETPs—products that profit from a decline in BTC value—recorded $11.8 million in inflows last week. This marks one of the highest weekly inflows to Short Bitcoin ETPs since May 2025, indicating an increase in bearish positioning among investors anticipating further downside.
The divergence between major cryptocurrencies and select altcoins underscores a shifting sentiment in the digital asset space. While macroeconomic uncertainty and regulatory ambiguity continue to pressure the market, the performance of assets like Solana and XRP suggests that investors are not entirely retreating from crypto, but rather reallocating capital into tokens with perceived relative strength or innovation potential.
This trend may also reflect growing interest in layer-1 blockchains and networks with active development ecosystems. Solana, in particular, has benefited from increased developer activity, new decentralized applications, and broader institutional exposure. Meanwhile, XRP continues to gain traction following legal clarity in its long-standing case with regulators.
The drop in AUM across crypto ETPs also raises questions about the sustainability of institutional participation in digital assets during periods of elevated volatility and uncertain monetary policy. Although ETPs provide a regulated and accessible route for traditional investors to gain crypto exposure, they remain susceptible to rapid sentiment shifts.
Looking ahead, market participants are closely watching U.S. economic indicators and policy decisions. Any signals regarding inflation trends or Federal Reserve interest rate policies could play a pivotal role in shaping near-term crypto fund flows.
Meanwhile, analysts and investors alike will be monitoring whether altcoins can continue to defy the downtrend and maintain their inflow momentum. The strength of Solana and other non-Bitcoin assets may hint at a broader diversification trend among crypto investors.
In conclusion, the current market dynamics reflect a complex landscape where macroeconomic factors, investor psychology, and asset-specific developments interact. While Bitcoin and Ethereum struggle to retain capital, pockets of strength in the altcoin market suggest that the crypto investment narrative is evolving rather than collapsing.