Key takeaway: Digital asset investment products experienced significant outflows totalling US$1.7B last week, marking the second consecutive week of withdrawals and flipping year-to-date flows into negative territory at US$1B net outflow.
The digital asset market is showing signs of investor fatigue. Since the price highs recorded in October 2025, total assets under management have declined by US$73B. This correction appears driven by three converging factors: the appointment of a more hawkish Federal Reserve Chair, continued large-holder (whale) selling patterns consistent with the historical four-year market cycle, and heightened geopolitical volatility.
Regional breakdown
US-domiciled products bore the brunt of the outflows at US$1.65B, representing 97% of global withdrawals. Canada and Sweden followed with outflows of US$37.3M and US$18.9M respectively. Minor inflows were observed in Switzerland (US$11M) and Germany (US$4.3M), suggesting some European appetite remains.
Asset-level performance
Bitcoin led outflows at US$1.32B, followed by Ethereum at US$308M. Recent market favourites XRP and Solana also saw redemptions of US$43.7M and US$31.7M respectively. However, short Bitcoin products attracted US$14.5M in inflows, with year-to-date AuM growth of 8.1%, indicating some investors are positioning defensively. Notably, Hyperliquid products saw US$15.5M inflows, thanks to its tokenised precious metals offering.
Portfolio implications
For advisors with digital asset allocations, this data suggests a period of consolidation may be underway. The concentration of outflows in US products and the uptick in short positioning warrant attention. The rotation into tokenised precious metals indicates investors seeking alternative store-of-value exposure within the digital wrapper. A measured approach to rebalancing may be prudent until clearer directional signals emerge.
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