Crypto Products Face $795M Outflows Amid Tariff Pressure

Digital asset investment products faced a challenging week, experiencing $795 million in outflows, marking the third consecutive week of declines. This trend has been driven by mounting pressure from recent tariff-related developments, which have dampened investor confidence across the crypto sector. Since early February, the total outflows have reached $7.2 billion, nearly erasing all year-to-date gains for 2024. As a result, net inflows for the year now stand at a mere $165 million.

Despite the outflows, there was a late-week recovery in crypto prices, which helped boost total assets under management (AuM) to $130 billion. This represents an 8% rebound from the April 8 low, following the partial rollback of controversial tariffs by President Trump. Bitcoin was particularly affected by last week’s withdrawals, with $751 million in outflows. However, the leading cryptocurrency still shows $545 million in year-to-date inflows.

Ethereum followed with $37.6 million in outflows, while Solana, Aave, and Sui also posted smaller losses. Interestingly, even short-bitcoin products saw outflows of $4.6 million, suggesting an overall risk-off sentiment rather than directional bets. A few altcoins defied the trend: XRP led inflows with $3.5 million, while Ondo, Algorand, and Avalanche each attracted modest investor interest.

The outflows signal continued caution among digital asset investors amid macroeconomic and geopolitical uncertainty. Meanwhile, BlackRock’s crypto ETF inflows plummeted by 83% in Q1 2025, following a strong end to 2024. While the firm still attracted $3 billion into Bitcoin and Ether ETFs, investor enthusiasm sharply declined amid stagnant crypto prices and rising market volatility. The inflows represented just 2.8% of iShares’ total for the quarter, indicating a broader investor shift toward caution under current economic conditions.

The crypto slowdown mirrored broader weakness across BlackRock’s ETF business, with total iShares inflows falling over 70% to $84 billion from $281 billion in the previous quarter. Despite holding $50.3 billion in digital asset AUM, crypto contributed less than 1% to BlackRock’s long-term revenue. Market volatility and shifting sentiment under the Trump administration were cited as key reasons behind the investor retreat.

Despite weak ETF market performance, crypto traders remain bullish on Bitcoin. For instance, Andrew Kang, founder of crypto venture firm Mechanism Capital, has doubled his bullish bet on Bitcoin, taking a $200 million long position. A wallet tied to Kang made a second $100 million leveraged long bet on Bitcoin, bringing his total position to $200 million. The recent trade carries an estimated potential gain or loss of around $6.8 million, reflecting Kang’s confidence in a near-term Bitcoin rally. Last week, Bitwise Chief Investment Officer Matt Hougan reiterated his December prediction that Bitcoin could hit $200,000 before the close of 2025. Hougan argued that recent developments in U.S. trade policy, particularly under Donald Trump’s renewed tariff push, could act as tailwinds for Bitcoin.