Cryptocurrency investment products recorded $1.07 billion in net outflows last week as investors reduced risk exposure amid inflation concerns and uncertainty surrounding a potential ceasefire between the United States and Iran, according to CoinShares' latest weekly report. The outflow ended a six-week streak of inflows and marked the third-largest weekly outflow this year. Geopolitical tensions, particularly disruptions around the Strait of Hormuz—a critical shipping route for global oil supplies—pushed energy prices higher and contributed to renewed US inflation reaching its highest level in more than three years, triggering a broader retreat in risk assets including a fall in the S&P 500 from all-time highs.
## Outflow Breakdown by Asset Class
Bitcoin (BTC) investment products accounted for the bulk of withdrawals with $982 million in outflows. Ether (ETH) products lost $249 million, marking their largest outflow since the week ending January 30. Despite last week's pullback, both Bitcoin and Ether ETPs remain firmly positive on a year-to-date basis.
Altcoin funds bucked the broader trend. XRP (XRP) investment products drew in $67.5 million, while Solana (SOL) funds added inflows of $55.1 million.
## Geographic Distribution of Flows
Most of the outflows originated in the United States, where investors pulled net $1.14 billion from funds. In contrast, several European markets, including Switzerland, Germany, and the Netherlands, posted modest inflows.
## Regulatory Sentiment Shifts
CoinShares head of research James Butterfill noted that select altcoins benefited from improving regulatory sentiment in the United States following progress on the CLARITY Act. The legislation, which would establish a clearer framework for regulating digital assets in the US, advanced out of the Senate Banking Committee last week with bipartisan support.
Industry advocates say the bill could reduce regulatory uncertainty and provide a more predictable legal environment, encouraging crypto companies and investment to remain in the US. Crypto Council for Innovation CEO Ji Hun Kim stated that "the momentum and progress are both strong" as the legislation moves through Congress.
However, several Senate Democrats have pushed for stronger ethics provisions, particularly concerning elected officials' financial ties to the crypto industry. Republican Senator Thom Tillis said "more work remains in the weeks ahead to make this legislation even better."
