Regulatory Delays Trigger $952M Exodus From US Crypto Funds
Digital asset investment products saw $952 million in weekly outflows, ending a month-long streak of inflows, driven by delays in U.S. crypto legislation and ongoing regulatory uncertainty. Almost all outflows occurred in the U.S. ($990 million), slightly offset by inflows into Canadian ($46.2 million) and German ($15.6 million) products. Analysts attribute the outflows to postponed passage of the U.S. Clarity Act and concerns over whale selling. Ethereum-based products experienced the largest outflows at $555 million, due to their sensitivity to regulatory clarity; Bitcoin products lost $460 million. Daily Bitcoin ETF flows turned negative despite recent gains, amid stagnant crypto prices and pre-holiday investor hesitation. Bitcoin struggles to stay above $90,000, though prediction markets currently see a 68% likelihood of a move to $100,000. Despite overall negative sentiment, Solana and XRP investment products attracted inflows of $48.5 million and $62.9 million respectively, suggesting selective demand. After this week’s withdrawals, it is now unlikely that 2024’s crypto exchange-traded product inflows will surpass last year’s levels. Assets under management fell to $46.7 billion from $48.7 billion.
