Crypto Products See $7.2B Outflows Since February Amid US Tariff Uncertainty

Crypto investment products have experienced significant outflows, totaling $7.2 billion since February, which has nearly erased the year-to-date gains. This trend has been driven by a series of tariff-related activities initiated by the United States President, which have created market uncertainty and a wave of negative sentiment among investors.

Last week alone, digital asset exchange-traded products (ETPs) saw outflows of nearly $800 million, marking the third consecutive week of such losses. Bitcoin-based products accounted for the lion's share of these outflows, with $751 million leaving the market. Ether products followed with $37.6 million in outflows. Despite the overall negative trend, some altcoins such as XRP, Ondo Finance, Algorand, and Avalanche saw small gains.

The outflows have been particularly impactful on major tokens, with Bitcoin and Ether-based products leading the way. However, even short-Bitcoin products saw outflows totaling $4.6 million, indicating a broad-based sell-off. Altcoins like Solana, Aave, and Sui also collectively saw outflows of over $6 million last week.

BlackRock’s iShares exchange-traded funds (ETFs) were among the hardest hit, with $342 million in outflows last week, bringing its total month-to-date outflows to $412 million. Despite these losses, BlackRock still holds about $2.8 billion in year-to-date inflows and over $49.6 billion in assets under management.

The recent tariff-related activities, including the imposition of a 10% baseline tariff on all imports and the setting of reciprocal tariffs, have contributed to the market uncertainty. This has led to a wave of negative sentiment that has resulted in record outflows from crypto investment products. The outflows have nearly wiped out all the year-to-date inflows, now amounting to just $165 million.

Despite the significant outflows, Bitcoin-related products still have year-to-date gains of $545 million. This indicates that while the market has seen a sell-off, there is still some underlying strength in the crypto market. The outflows have been driven by a combination of market uncertainty and negative sentiment, which has led to a broad-based sell-off in crypto investment products.