Crypto AuM Drops $39B as US Investors Withdraw $922M

Crypto outflows totaled $876 million last week, marking the fourth consecutive week of negative flows. This sustained sell-off has resulted in cumulative outflows of $4.75 billion over the past month, significantly eroding the year-to-date inflows to $2.6 billion. Consequently, total assets under management (AuM) have declined by $39 billion from their peak, now standing at $142 billion—the lowest level since mid-November 2024.

Investors in the US were the primary drivers of these outflows, withdrawing $922 million from digital asset investment products. This bearish sentiment in the US contrasted with other regions, where investors viewed the recent market pullback as a buying opportunity. Bitcoin remained the focal point of crypto outflows last week, with investors pulling $756 million from BTC investment products. Notably, short-Bitcoin products, designed to profit from price declines, also saw outflows of $19.8 million, the largest since December 2024. This suggests that some investors may be nearing a point of capitulation in their Bitcoin investments, closing their short positions as uncertainty looms.

Last week’s crypto outflows followed a pattern of sustained withdrawals. In the first week of March, digital asset investment products saw record-breaking outflows of $2.9 billion, driven by weak investor sentiment and heightened market fear. This was preceded by $508 million in outflows the previous week, amid investor caution, and $415 million in withdrawals before that, following the Federal Reserve’s hawkish rhetoric and concerns over inflation. The Federal Reserve’s stance on monetary policy has significantly influenced investor behavior in recent months. As inflation exceeds expectations, the Fed has signaled that interest rates may remain elevated for an extended period, reducing liquidity in financial markets and weighing on risk assets like crypto.

“We do not need to be in a hurry, and are well positioned to wait for greater clarity,” Fed chair Jerome Powell stated last week. With four straight weeks of outflows and persistent macroeconomic headwinds, the crypto market remains under pressure. While certain assets like Solana (SOL) and XRP continue to attract inflows, the overall sentiment remains bearish, particularly among US investors. If market conditions fail to improve, further outflows could follow in the coming weeks, reinforcing the cautious approach among investors.