Cryptocurrency investment products saw significant capital outflows last week, according to the latest CoinShares report. Digital asset exchange-traded products (ETPs) lost $1.07 billion, ending a six-week streak of inflows and marking the third-largest weekly outflow of the year.
Most of the withdrawals came from Bitcoin products, which recorded $982 million in outflows. Ethereum products followed with $249 million in losses, representing their largest weekly outflow since January 30.
Investors appeared to reduce exposure amid growing concerns over inflation in the United States and rising geopolitical uncertainty linked to tensions involving Iran and the Strait of Hormuz. The broader risk-off sentiment also pushed the S&P 500 away from recent record highs.
Geographically, the United States accounted for the majority of the outflows, with investors pulling a net $1.14 billion from crypto funds. At the same time, several European markets: Switzerland, Germany, and the Netherlands recorded modest inflows.
Altcoins Continue Drawing Investor Attention
Despite heavy selling pressure across Bitcoin and Ethereum products, several altcoins managed to attract fresh capital.
XRP investment products brought in $67.5 million during the week, while Solana funds attracted another $55.1 million. According to CoinShares Head of Research James Butterfill, improving regulatory sentiment in the United States is helping support interest in selected altcoins.
Regulatory Optimism Is Changing Market Behavior
One of the key developments influencing investor sentiment is the progress of the proposed CLARITY Act, a bill aimed at creating a clearer regulatory framework for digital assets in the United States.
The legislation recently gained bipartisan support in the Senate Banking Committee, fueling hopes that the crypto industry could soon operate under more predictable legal rules. Supporters believe this could reduce uncertainty for both crypto companies and institutional investors.
The changing regulatory landscape may already be influencing capital flows. Historical market trends show that investors often rotate into altcoins after major Bitcoin and Ethereum outflows, but analysts believe the current cycle may be different because regulation is becoming a direct market catalyst.
Earlier in 2025, analysts at JPMorgan suggested that spot ETFs tied to XRP and Solana could outperform Ethereum-based products during their early trading months.
For many investors, the market focus now appears to be shifting toward assets where regulatory clarity looks increasingly realistic rather than speculative.
