Geopolitics and the Fed Flush $414 Million From Crypto Funds in a Week

Digital asset investment products posted their first weekly outflows in over a month, as a mix of geopolitical tensions and shifting monetary policy expectations rattled investor confidence.

According to the latest data, crypto funds saw $414 million in net outflows, marking a sharp reversal after five consecutive weeks of inflows.

Crypto Funds Lost $414 Million Last Week

The pullback coincided with rising tensions tied to the Iran conflict and a notable shift in expectations around the Federal Reserve, as markets pivot from anticipating rate cuts to pricing in potential hikes.

The US accounted for the bulk of the outflows, with $445 million exiting digital asset funds, highlighting a decisive risk-off stance among American investors.

In contrast, European markets showed signs of opportunistic buying. Investors in Germany and Canada added $21.2 million and $15.9 million, respectively, suggesting confidence in long-term valuations despite short-term volatility.

Among individual assets, Ethereum was hit hardest, recording $222 million in outflows. The move pushed its year-to-date flows into negative territory, reflecting sustained pressure that analysts link in part to regulatory uncertainty surrounding the Clarity Act.

Bitcoin also faced headwinds, shedding $194 million during the week. However, it continues to show resilience, maintaining a strong $964 million in net inflows for the year so far.

This suggests that while short-term sentiment has weakened, institutional conviction in Bitcoin remains intact.

In contrast, XRP stood out as a rare gainer, attracting $15.8 million in inflows. Its performance positions it as a relatively safe haven within the digital asset space during periods of broader market stress.

The latest fund flow data shows how quickly sentiment in crypto markets can shift when macroeconomic and geopolitical risks converge, leaving investors to reassess their exposure in an increasingly uncertain environment.

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Source: https://beincrypto.com/geopolitics-fed-414-million-crypto-funds/