Cryptocurrency-based hedge funds have seen massive outflows over the past week due to global economic uncertainty, Trump's tariffs, aggressive monetary policy and the recent Bybit hack, according to CoinShares.
The cryptocurrency market continues to face a growing wave of uncertainty, which has led to a significant outflow of investors from digital asset investment funds. Global economic fear, exacerbated by Donald Trump’s tariff measures, a more aggressive monetary policy and events such as the recent Bybit hack, have generated a climate of risk aversion that is negatively impacting the sector.
BUY BITCOINAccording to CoinShares’ latest weekly report, these concerns have resulted in a record $2.900 billion outflow over the past seven days, bringing the total withdrawals over the past three weeks to $3.800 billion. This capital exodus reflects growing caution among investors, who are seeking refuge in assets considered safer in times of economic turmoil.
Bitcoin leads crypto fund outflows
Bitcoin, the leading cryptocurrency by market capitalization, has been the hardest hit by this sell-off, recording outflows totaling $2.590 billion in the past week.
The figure, shared by Coinshares head of research James Butterfill, underscores Bitcoin’s sensitivity to investor expectations about interest rates and economic policies. The Federal Reserve’s hawkish rhetoric, suggesting a less flexible stance on rate cuts, has weighed on the sentiment of Bitcoin investors, who have traditionally seen the cryptocurrency as a hedge against inflation and the devaluation of fiat currencies.
Source: Coinshares
But besides Bitcoin, Ethereum has not escaped negative market sentiment either. The second-largest cryptocurrency by capitalization recorded a record weekly outflow of $300 million. According to the Coinshares report, this figure highlights that while Ethereum has gained ground thanks to its growing adoption in the decentralized finance (DeFi) and non-fungible token (NFT) space, it is still vulnerable to changes in market sentiment and macroeconomic conditions.
BUY ETHEREUMConsequently, the combination of adverse macroeconomic factors and sector-specific events has created a challenging environment for Bitcoin, Ethereum and other cryptocurrencies.
Solana and Ton also suffer the impact of economic fear
The impact of economic uncertainty has not been limited to Bitcoin and Ethereum, as other major cryptocurrencies have also seen capital outflows in the past week. Solana, known for its high transaction speed and low fees, saw outflows of $7,4 million. Ton, another project with growing interest among users and investors, also saw withdrawals of $22,6 million. According to analysts, these figures show that economic fear extends to the entire cryptocurrency market, affecting both more established cryptocurrencies and emerging projects.
Source: Coinshares
A cocktail of uncertainty: Trump's tariffs, hacks and monetary policy:
Trade tariffs imposed by the United States on countries such as Canada, Mexico and China, coupled with higher-than-expected inflation data, have created a challenging environment for risk assets such as Bitcoin and Ethereum. Analysts point to this combination of factors to explain the recent wave of outflows in crypto funds.
But in addition to tariffs, which have created fear and uncertainty about the future of global trade, events such as the recent hack of Bybit, one of the leading cryptocurrency exchanges, have contributed to eroding investor confidence in the security and stability of the sector. This incident has reinforced the need for improved security and investor protection measures in the cryptocurrency space and has contributed to creating what Coinshares considers a “cocktail of uncertainty” that has driven investors to reduce their exposure to digital assets.
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In conclusion, the recent wave of withdrawals from cryptocurrency investment funds underlines the market's sensitivity to global economic uncertainty and sector-specific events, leading investors to seek refuge in assets considered more stable.
INVITE AND WINInvesting in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
