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Digital asset investment products recorded $288 million in net outflows for the week ending February 21, marking the fifth consecutive week of negative crypto fund flows. This brings cumulative outflows over five weeks to $4 billion.
While the pace of withdrawals is significant, it remains below the $6 billion lost over the same period last year, suggesting a more measured market adjustment rather than panic selling.
Trading volumes also reflected the cooling sentiment, with ETP (Exchange-traded product) volumes falling sharply to $17 billion. This is a steep decline from the record activity observed over the past several weeks.
Declining volumes, coupled with persistent outflows, suggest growing investor apathy and the risk of thin liquidity amplifying volatility in the near term.
The regional breakdown highlights a stark divergence in investor behavior. US-based funds accounted for $347 million in outflows.
Meanwhile, Europe and Canada recorded combined inflows of $59 million, driven by institutions in Switzerland ($19.5 million), Canada ($16.8 million), and Germany ($16.2 million).
This split signals a shift in confidence, with overseas investors viewing recent price weakness as an opportunity to selectively accumulate.
Meanwhile, US investors remain defensive, suggesting that they are maintaining a cautious stance amid broader market uncertainty.
Bitcoin accounted for the bulk of last week’s crypto outflows, with $215 million withdrawn from investment products.
Notably, short Bitcoin products saw $5.5 million in inflows, the largest of any asset, indicating that some investors are hedging or speculating on further downside.
Ethereum was the second-largest contributor to the net decline, posting $36.5 million in outflows. Other major products also struggled, including multi-asset funds ($32.5 million outflows) and Tron ($18.9 million).
This reflects a cautious stance toward broader market exposure, suggesting that sustained outflows in top-cap assets indicate a rotation away from perceived market leaders. Such an outcome creates potential opportunities for nimble investors in altcoins.
Indeed, amidst the overall negative sentiment, several altcoins continued to attract capital, albeit on a small scale.
XRP led altcoin inflows at $3.5 million, followed closely by Solana ($3.3 million) and Chainlink ($1.2 million).
While these gains were insufficient to offset broader outflows, they highlight selective rotation by investors toward assets with compelling narratives or relative momentum.
The latest data paints a nuanced picture of the crypto market, where the US remains a source of persistent selling pressure. Meanwhile, selective international accumulation and altcoin inflows point to pockets of confidence.
