The crypto market is burning red this week, possibly due to a significant outflow of capital from exchange-traded products (ETPs) for cryptocurrency. According to data from CoinShares, a total of $508 million was withdrawn from crypto-ETPs last week, with bitcoin (BTC) exchange-traded funds (ETFs) as the biggest losers.
Bitcoin ETFs lead the outflow
First, a quick question: what is the difference between ETFs and ETPs? An ETP is an umbrella term for listed investment products that track an underlying asset, such as shares, commodities or crypto.
ETFs are specific investment funds that track a basket of assets, such as an index or sector. In short, all ETFs are ETPs, but not all ETPs are ETFs.
Bitcoin-related ETPs saw an outflow of $571 million last week, continuing the trend of the previous week.
BlackRock’s iShares ETFs record rare losses
Bitcoin ETFs in particular saw a significant outflow last week, including even the ETF of BlackRock, the world’s largest asset manager.
BlackRock’s iShares ETFs recorded an outflow of $112 million, a rare loss for the asset manager. However, yesterday the fund again recorded an outflow of $158.6 million
Grayscale Investments and Fidelity Digital Assets saw the biggest losses, with outflows of $170 million and $166 million respectively.
XRP investors continue to buy
Remarkably, bitcoin was the only cryptocurrency to see significant outflows, while various altcoins saw an inflow of capital. Ripple’s (XRP) ETPs saw an inflow of $38 million. This brought the total inflow since November 2024 to $819 million.
This increase could indicate optimism among investors about a possible favorable outcome of the lawsuit between Ripple and the US Securities and Exchange Commission (SEC).
In addition, there seems to be speculation about the possible approval of a spot-XRP-ETF, although there is no certainty about this yet. In addition to XRP, other altcoin ETPs also saw a slight influx: Solana (SOL) added $8.9 million, Ethereum (ETH) grew by $3.7 million and Sui (SUI) was able to record $1.5 million.
Trump causes a great deal of uncertainty in the markets
The large outflow from bitcoin funds is largely due to increasing uncertainty in the financial markets following the inauguration of US President Donald Trump. There are also concerns about trade policy, inflation and monetary guidelines.
According to James Butterfill, head of research at CoinShares, the ongoing selling pressure shows that investors are cautious. The American market was responsible for the majority of the outflows, totaling $560 million.
This negative sentiment was not reflected in Europe, however, where crypto ETPs actually showed a steady inflow. Germany and Switzerland were at the forefront of this, with inflows of $30.5 million and $15.8 million, respectively.
