Crypto Exodus Hits $1.7 Billion but Tokenized Metals Draw Investor Inflows

Global crypto investment products saw $1.7 billion in net outflows last week, extending year-to-date flows to a net $1 billion outflow, according to CoinShares. This represents a shift in investor sentiment, with capital moving out of major digital assets and into more defensive positions according to CoinShares.

Bitcoin-based funds led the outflows, with BlackRock's IBIT recording $1.32 billion in weekly redemptions. Ethereum products also saw $308 million in outflows, as investors reduce exposure to volatile digital assets. In contrast, short Bitcoin investment products attracted $14.5 million in inflows, pushing year-to-date assets under management up by 8.1%.

At the same time, tokenized precious metals, such as silver and gold, drew significant inflows. Products tied to these assets saw $15.5 million in inflows, signaling a growing preference for alternative store-of-value instruments amid market uncertainty.

Why Did This Happen?

Investor sentiment has deteriorated due to a combination of macroeconomic and market-specific pressures. James Butterfill, head of research at CoinShares, attributed the outflows to the appointment of a more hawkish U.S. Federal Reserve chair, ongoing whale selling associated with the four-year crypto cycle, and heightened geopolitical volatility.

The exodus has also coincided with a sharp drawdown in cryptocurrency prices. Bitcoin dropped roughly 12% over the past week, while Ethereum fell about 22%. This price weakness has accelerated outflows and contributed to a decline in assets under management by $73 billion since October 2025.

How Did Markets React?

The outflows have pushed digital asset investment products into a defensive posture. Short Bitcoin products saw significant inflows, reflecting increased hedging against potential further downside. Meanwhile, tokenized silver and gold attracted capital as investors seek safer, more tangible assets according to market analysis.

Bitcoin and Ethereum dominance has also shifted. Bitcoin remains the leading digital asset, maintaining a market dominance of 59%, while mid- and small-cap tokens struggled to sustain gains. Institutional investors have increasingly favored large-cap exposure, reflecting caution in the face of geopolitical uncertainty.

What Are Analysts Watching Next?

Analysts are closely monitoring key U.S. economic events and potential changes in market conditions. A slowdown in large-holder selling and a reduction in geopolitical risks could help stabilize sentiment. However, these factors remain uncertain in the near term.

In the derivatives market, traders have migrated toward options rather than perpetual futures, seeking defined-risk structures and downside protection. This shift suggests a more resilient market structure, even as near-term conviction remains muted.

The performance of tokenized precious metals continues to draw attention. As capital rotates into these assets, their role as an alternative store of value is gaining traction. Investors are watching whether this trend persists and how it might influence broader market dynamics.