Recent increases in tariffs by President Donald Trump have triggered notable sell-offs in the cryptocurrency market. A weekly report published by CoinShares revealed that approximately $795 million was withdrawn from cryptocurrency funds last week, contributing to a staggering total outflow of $7.2 billion since February. This drastic decrease has nearly negated all inflows observed in 2023, although a slight recovery at week’s end saw total assets under management rise to $130 billion.
How Do Bitcoin Funds Fare?
The bulk of these withdrawals originated from U.S.-based funds, which saw an impressive outflow of $763 million. Meanwhile, European markets such as Switzerland, Hong Kong, Sweden, and Germany collectively faced a mere exit of $34.3 million. In contrast, Canada, Brazil, and Australia managed to attract a minimal influx of $2.7 million into their cryptocurrency funds.
What About Ethereum and Other Altcoins?
Ethereum-focused investment funds were not spared, recording a net outflow of $37.6 million last week. U.S. spot Ethereum ETFs, specifically, faced significant withdrawals amounting to $82.5 million, underlining a climate of uncertainty among Ethereum stakeholders.
Notable altcoin funds, including those for Solana, Aave, and Sui, reported slight outflows. Conversely, investments in XRP, Ondo, Algorand, and Avalanche demonstrated continued interest, hinting at pockets of resilience within the market.
From a broader perspective, China’s response to U.S. tariffs with a 125% tariff initially escalated market tensions. However, potential exemptions in key sectors like electronics and semiconductors have offered some hope. BRN analyst Valentin Fournier suggests that stable inflation rates and anticipated interest rate reductions might be fostering renewed momentum in the cryptocurrency sector.
- U.S. funds faced the most significant withdrawals, totaling $763 million.
- Bitcoin products alone saw a net exit of $751 million.
- Ethereum funds recorded a $37.6 million outflow, indicating investor caution.
- Some altcoin products still attracted investments, reflecting selective interest.
The current climate in the cryptocurrency market highlights the intricate interplay between geopolitical events and investor behavior, suggesting that caution remains prevalent as stakeholders navigate ongoing uncertainties.
