Crypto Funds See $795 Million Outflows Amid Fed Uncertainty

Investors withdrew $795 million from crypto funds last week, marking the third consecutive week of sell-offs. This decline was primarily driven by outflows from Bitcoin and Ethereum funds, with Bitcoin leading the way at $751 million and Ethereum following at $37.6 million. The extended decline in digital asset investment products was attributed to tariff uncertainty and concerns over the Federal Reserve's monetary policy.

BlackRock’s iShares ETF products experienced the highest investor withdrawals, with BTC ETFs and ETH ETFs collectively seeing $342 million in outflows. From a month-to-date perspective, BlackRock bled $412 million, nearly half a billion over the past two weeks alone. Grayscale products followed closely with $187 million outflows, nearly half of BlackRock’s dump.

On the altcoins front, Solana-based products ranked third after ETH in outflows, with a $5.1 million sell-off. Surprisingly, XRP-based and multi-asset funds were the only outliers during last week’s decline. XRP saw $3.4 million inflows last week, and the overall month-to-date flows stood at $1.5 million. This indicates that investors preferred XRP and multi-asset funds to individual assets like BTC or ETH in the first half of April. Additionally, the new 2x Tecrium XRP ETF saw record inflows, further supporting this trend.

Some macro analysts projected that the decline could continue. According to the analyst's forecast, a recent speech by Fed chair Jerome Powell will be bad for risk assets in May, including crypto. This is because Powell and Governor Waller prefer patience amidst the elevated uncertainty, which is good for bonds but bad for risk assets. This sentiment reflects the broader market concerns about the impact of tariff uncertainty and Federal Reserve policies on the crypto market.