Market sentiment turns negative after four-week inflow streak
Global crypto exchange-traded products (ETPs) recorded $952 million in outflows last week, marking the first weekly decline in four weeks, according to CoinShares. The sudden reversal followed delays to the U.S. Clarity Act, reigniting regulatory uncertainty and triggering renewed selling pressure across major crypto investment products.
Funds issued by leading providers such as BlackRock, Bitwise, Ark 21Shares, and Grayscale were among those impacted. CoinShares Head of Research James Butterfill said the stalled legislative progress in Washington unsettled institutional investors, reversing three consecutive weeks of inflows and driving the largest monthly outflow seen so far this year.
Regulatory uncertainty weighs on crypto investment products
The Clarity Act, designed to establish clearer regulatory rules for digital assets in the United States, had been expected to advance before year-end. However, U.S. crypto czar David Sacks confirmed that the bill’s markup has been pushed to January, extending uncertainty around crypto asset classification, exchange oversight, and issuer responsibilities.
According to Butterfill, this prolonged ambiguity has dampened near-term sentiment, particularly among U.S.-listed crypto ETPs. The delay also raised concerns over potential whale-led selling, amplifying downside pressure across the market.
U.S. dominates outflows as global investors diverge
Nearly all of last week’s outflows originated in the United States, which accounted for $990 million in negative flows. In contrast, Canada and Germany posted modest inflows of $46.2 million and $15.6 million, respectively. This divergence suggests that while U.S. institutional demand weakened, some non-U.S. investors remained more resilient despite the broader global drawdown.
Ethereum and Bitcoin lead weekly losses
Ethereum saw the largest impact, with $555 million in outflows over the week. CoinShares noted that ETH is particularly sensitive to developments around the Clarity Act, given its central role in ongoing debates over crypto market structure and asset categorization. Despite the recent selling, Ethereum year-to-date inflows remain strong at $12.7 billion, well above the $5.3 billion recorded over the same period last year.
Bitcoin investment products also faced pressure, recording $460 million in outflows. While BTC year-to-date inflows stand at $27.2 billion, they remain significantly below the $41.6 billion seen during the 2024 cycle. CoinShares said this points to cooling demand from U.S. institutional investors, who drove much of last year’s record activity.
Selective inflows favor Solana and XRP
Not all large-cap crypto assets followed the broader trend. Solana attracted $48.5 million in inflows, while XRP recorded $62.9 million, extending a multi-week pattern of relative strength. CoinShares said these assets have benefited from selective investor positioning, even as flagship Bitcoin and Ethereum products experienced heavy selling.
Record annual inflows now unlikely
CoinShares now believes it is unlikely that crypto ETP inflows in 2025 will surpass last year’s record. Total assets under management currently stand at $46.7 billion, compared with $48.7 billion in 2024. Butterfill said the recent outflows and ongoing regulatory uncertainty have significantly reduced the chances of a new annual high.
Crypto prices hold steady despite outflows
Despite the sharp pullback in investment flows, crypto prices remained relatively stable. Bitcoin rose nearly 2% over the past week and is trading around $89,700, while Ethereum showed flat price action near the $3,000 level.
The disconnect between prices and ETP flows suggests that while regulatory concerns are weighing on institutional sentiment, broader market support for leading cryptocurrencies remains intact—for now.
