Crypto investment products extended a losing streak to three consecutive weeks last week, driven by persistent selling pressure and a notable absence of institutional demand. Exchange-traded products (ETPs) in the sector recorded $1.67 billion in net outflows, marking the second-largest weekly withdrawal of 2026. This fresh wave of capital flight has accumulated three-week losses to $4.21 billion, dragging total assets under management down to $141 billion, a level not seen since early April. James Butterfill, head of research at CoinShares, attributed the surge in outflows to a risk-off move triggered by geopolitical tensions involving Iran, which has effectively neutralized any potential market cushioning from progress on the CLARITY Act. He noted that the current trajectory mirrors the January-February episode, which previously delivered five consecutive weeks of negative flows.

Bitcoin (BTC) ETPs dominated the weekly outflow narrative, with $1.44 billion exiting the funds, representing the largest single-week withdrawal for the asset class so far this year. Despite this significant weekly drop, BTC funds remain $2.4 billion down month-to-date but still retain approximately $1.2 billion in net inflows year-to-date. Total assets under management for Bitcoin-specific products have contracted to $114.6 billion. Ether (ETH) funds also continued to face selling pressure, registering $257.3 million in outflows, which pushes year-to-date losses for the asset to $346 million. Data compiled by Woofun AI shows that the breadth of market participation has narrowed significantly, with only five assets recording substantial inflows above $1 million, a sharp decline from nine assets the previous week.

Amidst the broader sell-off, XRP managed to lead positive momentum with $20.3 million in inflows, while Hyperliquid (HYPE) and Near (NEAR) followed with $10.8 million and $7.6 million respectively. Regionally, the United States was the primary driver of the global outflow story, accounting for $1.63 billion in withdrawals. This figure aligns closely with $1.42 billion in outflows from US-listed spot Bitcoin exchange-traded funds (ETFs), . Germany joined the risk-off sentiment with $25.7 million in outflows, while Sweden and Hong Kong recorded $6.6 million and $4.5 million in withdrawals respectively. The Netherlands remained the sole jurisdiction to see inflows exceeding $1 million, though the figure of $1.3 million represented a significant drop from $6.6 million the prior week.

Analysis from the derivatives trading desk at Laser Digital suggests the crypto sell-off last week occurred without a clear fundamental catalyst, instead being heavily influenced by underperforming equities. The unit cited a distinct lack of demand, highlighting that Michael Saylor's Strategy announced it did not purchase any BTC between May 18 and May 24. Woofun AI notes that with STRC still trading below par and continued disinterest from retail buyers, the market structure indicates BTC is expected to remain weak for the foreseeable future. This confluence of geopolitical anxiety, reduced corporate accumulation, and broad equity market weakness has created a challenging environment for digital asset liquidity.