Digital Assets Report: $795 Million Outflows Indicate Ongoing Market Struggles

Digital asset investment products encountered outflows of $795 million, marking the third consecutive week of declines, amid persistent negative sentiment. Bitcoin saw the largest outflows at $751 million, while Ethereum followed with $37.6 million. Although total outflows since February hit $7.2 billion, select altcoins like XRP showed minor inflows, signalling mixed market sentiments.

In the latest Digital Asset Fund Flows Weekly Report, it’s been reported that digital assets faced significant challenges last week. Specifically, investment products in this sector experienced outflows totalling $795 million. This marks the third consecutive week of declines, which brings the cumulative outflows since early February to a staggering $7.2 billion, effectively erasing nearly all year-to-date (YTD) inflows that now stand at a mere $165 million.

Bitcoin was at the forefront of these outflows, with a hefty $751 million in losses last week. Despite this, it still manages to maintain YTD inflows of $545 million, reflecting a degree of resilience amidst ongoing market turbulence. Meanwhile, Ethereum also faced its share of difficulties, witnessing outflows of $37.6 million. These figures underline a prevalent negative sentiment towards digital assets, further accelerated by recent tariff developments.

Interestingly, the outflows were pervasive across different regions and asset providers, suggesting a widespread loss of confidence. Even short-bitcoin strategies faced setbacks, recording outflows of $4.6 million. Additionally, Ethereum wasn’t alone; Solana, Aave, and Sui also experienced declines of $5.1 million, $0.78 million, and $0.58 million respectively, as investors appeared increasingly cautious.

On a somewhat brighter note, a select group of altcoins managed to defy the trend with minor inflows. XRP led the charge with inflows of $3.5 million, showcasing some resilience. Furthermore, Ondo, Algorand, and Avalanche reported minor inflows of $0.46 million, $0.25 million, and $0.25 million, respectively. This indicates that while the broader market sentiment remains negative, some assets are still attracting investment.

The report notes a slight recovery towards the end of the week, which saw total assets under management (AuM) recover from their lowest point—hitting $130 billion—marking an 8% increase compared to early April. This recovery can be partly attributed to President Trump’s temporary reversal of tariffs that had previously led to significant stress in the market.

In closing, while the overall environment for digital assets looks quite grim with ongoing outflows, select altcoins are showing some signs of life, hinting that investments are still being made albeit cautiously. The continuous fluctuation in sentiment highlights the volatile nature of the digital asset landscape.
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