CoinShares: $414M pulled from crypto funds as Fed rate fears rattle markets
Digital-asset investment products suffered a $414 million net outflow last week, ending a four-week streak of inflows and dragging total assets under management to $129 billion — the lowest level since early February, CoinShares’ head of research James Butterfill reports.
Why it happened
CoinShares attributes the reversal largely to macro forces: rising inflation expectations and shifting Federal Open Market Committee rate-cut bets. Market pricing has moved away from earlier-expected rate cuts and now implies the possibility of a rate hike as soon as June, creating renewed risk aversion among investors.
Regional picture
The pain was concentrated in the United States, which saw $445 million in outflows. By contrast, Germany and Canada “bought the dip,” registering inflows of $21.2 million and $15.9 million, respectively. CoinShares has also flagged pockets of demand outside the US — notably Hong Kong (which recorded $23.1 million of inflows in a single week earlier this month) and Switzerland.
Asset-level divergences
Beneath the headline outflows were sharp differences by token:
- XRP-linked products were a notable outlier, drawing $15.8 million last week after a rocky start to the year.
- Bitcoin and Ethereum products remain highly volatile: CoinShares previously recorded a $1.09 billion outflow from bitcoin vehicles in one week in January and $630 million of outflows from ethereum funds over the same period.
Outlook: blip or deeper pullback?
Butterfill says structural demand — particularly from spot bitcoin ETFs and the broader move toward tokenized assets — should provide a longer-term tailwind, but that momentum is vulnerable to tighter-than-expected Fed policy. Research tied to Morgan Stanley has described spot bitcoin ETFs as the “last taboo” for mainstream advisors, signaling how quickly adoption can accelerate once macro conditions stabilize. At the same time, rising U.S. Treasury yields (above ~4.4%) have increasingly linked crypto performance to macro risk cycles.
Whether last week’s $414 million exodus proves to be a short-lived wobble or the beginning of a more sustained retrenchment will hinge on the tug-of-war between those macro headwinds and ongoing structural inflows, CoinShares’ flow data suggest.
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