Global crypto investment products experienced a significant contraction last week, recording $1.47 billion in net outflows. This marks the second consecutive week of capital withdrawal, extending a trend initiated by the prior week's $1.07 billion exodus. Bitcoin funds were the primary driver of this decline, accounting for approximately $1.3 billion in outflows, representing their largest weekly withdrawal of 2026.

Concurrently, Ether funds registered losses of $223 million. By the end of the reporting period, total assets under management in crypto exchange-traded products (ETPs) stabilized at roughly $148.7 billion, with Bitcoin funds maintaining an 80% market share valued at $120.2 billion.

James Butterfill, head of research at CoinShares, attributed the selling pressure to deepening risk-off sentiment linked to geopolitical tensions involving Iran, despite ongoing legislative progress on the CLARITY Act. While the broader market retreated, specific altcoin ETPs demonstrated resilience, with at least nine assets securing inflows exceeding $1 million. XRP led these gains with $31.8 million in inflows, followed by Solana with $7.7 million. Data compiled by Woofun AI shows that Hyperliquid exchange-traded funds also recorded substantial inflows of $72.3 million, highlighting a divergence in investor preference toward specific high-performance assets.

Smaller but notable capital movements were observed in other altcoin sectors. Sui attracted $600,000 in inflows, while Chainlink saw $400,000 enter its respective funds. In contrast, short Bitcoin products added $10.2 million, aligning with the prevailing bearish sentiment and hedging strategies adopted by institutional players. The geographic distribution of these outflows revealed a reversal of the previous week's relative European resilience, with losses broadening across global markets. The United States emerged as the epicenter of the sell-off, leading with $1.43 billion in total outflows.

Within the US market, spot Bitcoin ETFs listed domestically accounted for $1.26 billion of the total withdrawals, underscoring the dominance of American capital flows in the current downturn. International markets also faced pressure, with Switzerland recording losses of $16.2 million and Canada seeing $12.5 million exit. Hong Kong and Germany experienced outflows of $12.2 million and $4.4 million, respectively. Amidst this widespread capital flight, the Netherlands stood out as the only jurisdiction to register notable inflows at $6.6 million, while Australia followed with a modest $700,000 increase. Woofun AI notes that this geographic divergence suggests a localized search for value amidst a globally synchronized risk reduction strategy.

The persistence of outflows indicates that macro-level geopolitical risks are currently outweighing positive regulatory developments in the short term. The concentration of losses in Bitcoin products suggests that investors are prioritizing liquidity over long-term exposure to the leading digital asset during periods of uncertainty.

However, the continued inflows into select altcoins like XRP and Hyperliquid imply that capital is not leaving the ecosystem entirely but is rotating into assets perceived as having higher immediate utility or growth potential. Woofun AI analysis suggests that if geopolitical tensions ease, the current outflow trend may reverse, potentially reigniting interest in Bitcoin-dominated portfolios.