The cryptocurrency investment market has faced a significant downturn, with exchange-traded products (ETPs) witnessing record outflows of $6.4 billion over the past five weeks. According to a CoinShares report, last week alone saw $1.7 billion leave the market, marking the longest streak of outflows since global crypto ETP tracking began in 2015.
Total assets under management (AuM) in the sector have dropped by $48 billion, shrinking to $133 billion. Year-to-date inflows, which once showed strong momentum, have now declined to just $912 million.
US Investors Lead Bitcoin Exodus
The United States played a dominant role in this capital flight, accounting for 93% of last week’s outflows. Major US-based spot Bitcoin ETF providers, including BlackRock, Grayscale, Fidelity, and Ark 21Shares, saw combined outflows of nearly $1 billion:
- BlackRock: $401 million
- Grayscale: $134 million
- Fidelity: $317 million
- Ark 21Shares: $68 million
Bitcoin-related investment products bore the brunt of this downturn, witnessing $978 million in outflows last week alone. Over the past five weeks, Bitcoin products have recorded a staggering $5.4 billion in total outflows. Even short-Bitcoin positions suffered, with investors withdrawing $3.6 million, likely due to Bitcoin’s sideways price movement.
Ethereum, Solana, and Binance Struggle
Ethereum and Solana investment products also faced challenges:
- Ethereum outflows: $175 million
- Solana outflows: $2.2 million
Blockchain equity funds weren’t spared either, with $40 million exiting the sector.
Meanwhile, Binance’s investment products faced near-total liquidation after a seed investor pulled out, reducing its AuM to just $15 million.
XRP Defies the Downturn
While most crypto assets struggled, XRP stood out as a rare winner, attracting $1.8 million in inflows last week. Over the past month, it has accumulated $7.4 million in fresh investments, making it the second-best performer after Solana ($14.2 million).
For the year, XRP ranks among the top-performing crypto investment products, with total inflows of $212 million, behind only Bitcoin ($612 million) and Ethereum ($412 million). This rising demand has pushed XRP’s total assets under management to a record $1.2 billion.
SEC Settlement Hopes Boost XRP
Several factors have contributed to XRP’s resilience:
- Ripple vs SEC Lawsuit: The long-running legal battle between Ripple and the US Securities and Exchange Commission (SEC) is reportedly nearing a settlement, boosting investor confidence.
- Potential Commodity Status: Reports suggest the SEC may classify XRP as a commodity, increasing the chances of an XRP-focused spot ETF approval.
As market uncertainty persists, XRP’s continued strength could signal growing institutional interest in the asset, even as other cryptocurrencies struggle with capital outflows.
