Investment products tied to digital assets recorded $1 billion in net inflows last week, reversing a five-week run of $4 billion in outflows. CoinShares said that no single macro event explains the change. Instead, previous price softness, technical breakdowns, and renewed buying activity among major Bitcoin holders appear to have supported the rebound.
Market participants have recently focused more on identifying buying opportunities than on scaling back their exposure.
Global Crypto Funds Recover
According to the latest edition of CoinShares’ Digital Asset Fund Flows Weekly Report, weekly fund flows were dominated by Bitcoin, which brought in $881 million. At the same time, short Bitcoin products drew $3.7 million. Ethereum attracted $117 million, its strongest weekly performance since mid-January, although both assets remain in net outflows for the year.
Solana, on the other hand, posted $53.8 million for the week and $156 million year-to-date. Chainlink gained $3.4 million over the past week, while XRP and Sui added $1.9 million and $0.4 million, respectively. Multi-asset products were the only segment to see withdrawals, with $6 million exiting.
Regionally, sentiment was largely consistent. The United States led with $957 million in new investment. Canada, Germany, and Switzerland added $34.1 million, $31.7 million, and $28.4 million, respectively. Hong Kong recorded $6.8 million, while Brazil brought in $3.2 million.
Geopolitical Shock
Since the ETF flows last week, there has been a sharp deterioration in geopolitical conditions. On Monday, crypto markets remain largely range-bound amid escalating geopolitical tensions, particularly involving Iran. An initial US strike on Iran over the weekend pushed Bitcoin toward about $63,000 and Ethereum below $2,000 before prices pulled back into established trading ranges.
Approximately $300 million of long positions were liquidated when the news broke, a significant but contained amount, which, according to QCP Capital, suggests positioning was already reduced in the days before the event. The firm noted that this could also mean that investors are treating Bitcoin less as a “weekend macro hedge” and considering alternatives such as tokenized gold, which trades 24/7 and has seen increased risk-off interest.
Options markets showed a spike in very short-term volatility but otherwise reacted moderately, which indicates traders may have been relatively well positioned for possible volatility given warning signs during the prior week. QCP pointed to a similar event last June, when BTC dipped on geopolitical news but recovered and later rallied. Options flow data also revealed buyers of call contracts with expiration later in March, which is consistent with some participants gearing up for a rebound.
“Despite price action looking fairly constructive, we remain cautious as tensions and uncertainty continue to build. The conflict is still in its early stages, and it’s premature to conclude whether it will remain contained or evolve into a broader regional confrontation involving other Gulf states.”
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