Digital Asset Funds Experience $454M Weekly Outflows as Hopes for Fed Rate Cuts Diminish: CoinShares

Digital asset investment products have seen a significant outflow of $454 million last week, marking a notable decline in investor sentiment. This trend comes as expectations for a rate cut by the U.S. Federal Reserve fade, driven by recent macroeconomic data indicating persistent inflation. The report from CoinShares highlights the shifts in investor behavior across various regions and assets.

Key Takeaways

Digital asset investment funds faced net outflows of $454 million last week, exacerbating previous losses.
The significant outflows, totaling $1.3 billion over four days, have nearly reversed earlier gains from the beginning of the year.
Investor optimism has waned due to robust economic data dampening expectations for interest rate cuts by the Federal Reserve.
The U.S. accounted for the majority of outflows, with $569 million withdrawn from U.S.-listed products, while some non-U.S. markets saw capital inflows.
Bitcoin and Ethereum recorded the highest outflows among digital assets, indicating cautious sentiment toward these major cryptocurrencies.
Despite the overall downturn, select altcoins like XRP, Solana, and Sui attracted new investments.

Crypto ETPs

Impacts of Rate Cut Expectations on Market Dynamics

In early 2026, investor enthusiasm was buoyed by hopes for a potential easing of the Federal Reserve's monetary policy. However, the release of stronger-than-expected economic data and stable labor market indicators has curbed these hopes, leading to more conservative investment behavior in the digital assets market. This trend indicates the vulnerability of cryptocurrencies to changing macroeconomic conditions, with much of the capital that had previously entered the market now exiting rapidly.

Regional Insights on Outflows

CoinShares reports that the majority of the recent outflows originated from the United States, where U.S.-listed products experienced withdrawals totaling $569 million. In contrast, certain non-U.S. markets attracted new investments, with Germany leading the way by receiving $58.9 million, followed by Canada at $24.5 million and Switzerland at $21 million. This highlights a significant difference in sentiment between U.S. and European investors.

Asset-Level Trends Amid Withdrawals

At the asset level, Bitcoin has been the most impacted, with outflows reaching $405 million over the past week. Notably, short-Bitcoin products also saw withdrawals of $9.2 million, suggesting that bearish investors may be divided in their outlook rather than taking a definitive stance against Bitcoin’s future. Ethereum followed with significant outflows of $116 million as caution toward major digital assets intensified. Additionally, multi-asset products faced outflows of $21 million, alongside smaller withdrawals from Binance- and Aave-linked products, which accounted for $3.7 million and $1.7 million respectively.

Altcoins Showing Resilience

Despite the prevailing risk-averse sentiment, certain altcoins managed to attract investor interest. XRP led its counterparts with inflows of $45.8 million, followed closely by Solana at $32.8 million and Sui at $7.6 million. These trends suggest a selective investment approach, with investors more inclined to channel funds into assets viewed as having stronger short-term potential or greater resilience in the face of macroeconomic uncertainty.

In summary, the digital asset market has seen significant shifts in sentiment and capital flows, driven partly by changing expectations surrounding U.S. Federal Reserve policies and broader economic indicators.