Digital asset investment products recorded a net outflow of $454 million over the past week as investor positioning changed quickly in early January. The market experienced four consecutive days of net withdrawals, which surged to roughly $1.3 billion, erasing the $1.5 billion that entered products during the first two trading days of January.
CoinShares attributed the change in direction largely to growing concerns that the Federal Reserve is less likely to deliver an interest rate cut in March, following stronger-than-expected recent macroeconomic data.
XRP, Solana Defy Broader Slump
In the latest edition of Digital Asset Fund Flows Weekly Report, CoinShares revealed that Bitcoin was the most affected asset, as products linked to the cryptocurrency saw $405 million leave during the week. At the same time, short-Bitcoin products also registered $9.2 million in outflows, which was indicative of a lack of consensus among investors on near-term price direction.
Ethereum-based products also faced significant selling pressure, with $116 million outflows, while multi-asset strategies saw $21 million exit.
Smaller declines were observed in products tied to Binance and Aave, which saw $3.7 million and $1.7 million leave, respectively.
On the other hand, several altcoin investment products continued to attract fresh capital. XRP led the group as it drew $45.8 million, followed by Solana with $32.8 million and Sui with $7.6 million. Chainlink also saw renewed interest and added $3 million over the past week.
From a regional perspective, the recent pullback in digital asset investment products was overwhelmingly driven by the United States, while investor activity outside the US remained net positive, though at much smaller scales. The US saw $569 million leave digital asset products.
Contrastingly, Germany recorded the strongest inflow of $58.9 million, followed by Canada with $24.5 million and Switzerland with $21 million. Smaller gains were reported in Australia with $4.7 million, the Netherlands with $3.2 million, France with $1.4 million, Sweden with $0.4 million, and New Zealand with $0.3 million.
“Push-Out of Bullish Expectations”
This cautious approach has been visible in recent price action. QCP Capital, for one, said recent Bitcoin price action reflects ongoing pressure and limited upside in the near term. While the asset initially rose alongside gold and silver during early Asian trading as the US dollar weakened, the move quickly faded.
Bitcoin failed to maintain levels above $92,000 and retreated during the European session. In doing so, the crypto ended up repeating a pattern seen several times in the fourth quarter of last year.
According to QCP, BTC has repeatedly struggled to hold gains even when supported by narratives that would normally be considered positive. The firm also identified changes in options markets, where traders reduced some bullish long-dated call positions and rolled others to later expiries. This means that expectations for higher prices have been delayed.
Continued selling during US trading hours, lingering supply pressures, and rising macro uncertainty are still weighing on prices, as near-term volatility risks remain high ahead of US economic and legal developments.
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