Crypto ETP Inflows Plummet Amid DeepSeek Panic and Trade War Fears

Crypto ETP inflows dive amid market concerns and DeepSeek panic

Cryptocurrency exchange-traded products (ETPs) witnessed a significant decline in inflows, garnering only $527 million last week, a sharp 72% drop from the $1.9 billion recorded in the previous week, as reported by CoinShares on February 3. The downturn in investor sentiment was attributed to concerns over China’s AI platform DeepSeek and apprehensions of a global trade war due to President Donald Trump’s push for stricter import tariffs.

CoinShares research director James Butterfill highlighted that the news surrounding DeepSeek alone triggered $530 million in outflows on January 27. Despite the overall market unease, Bitcoin ETPs managed to attract $486 million in inflows, contributing to a year-to-date total of $4.9 billion. Short-Bitcoin products experienced their second consecutive week of inflows, albeit reduced by 27% to $3.7 million.

In contrast, Ether-based ETPs did not fare as well, with no new inflows last week, a situation mirrored by Litecoin ETPs. However, since the beginning of 2025, ETH ETPs have seen inflows amounting to $177 million.

XRP investment products, on the other hand, continued to see positive movement, with $14.5 million in weekly inflows, making it the second-best-performing altcoin in ETPs with year-to-date inflows reaching $105 million.

The week also saw intensified selling activity in crypto investment products by Grayscale Investments and Bitwise. Grayscale experienced a substantial increase in outflows at $298 million, marking a 140% rise from the previous week’s $124 million. This brings Grayscale’s year-to-date outflows to $690 million. Bitwise’s exchange-traded funds were not spared, with outflows skyrocketing over 560% to $126 million.

BlackRock (NYSE:BLK)'s crypto ETFs also felt the impact of market volatility, with inflows slowing by 58% to $918 million, down from $1.4 billion the week before.