Crypto funds suffer second-largest 2026 outflows as Iran tensions mount
In brief
- $1.67 billion withdrawn from crypto funds last week, second-largest outflow of 2026
- Bitcoin funds posted largest weekly outflow at $1.44 billion
- XRP and Hyperliquid attracted inflows amid broader digital asset contraction
Outflows Accelerate Across Major Markets
The withdrawals marked the third consecutive week of net outflows, bringing total redemptions over the past three weeks to $4.21 billion. Assets under management across digital asset investment products fell to $141 billion from $148 billion the previous week. The United States accounted for nearly all selling pressure. Investors pulled $1.63 billion from crypto funds domestically, while Germany recorded $25.7 million in outflows and Sweden and Hong Kong posted withdrawals of $6.6 million and $4.5 million, respectively.
Bitcoin bore the brunt of the selling. Bitcoin investment products lost $1.44 billion during the week, marking the largest weekly bitcoin outflow of 2026. Year-to-date bitcoin inflows fell to $1.19 billion, down from $2.6 billion a week earlier. Ethereum funds also came under pressure, recording $257.3 million in outflows.
Geopolitical Risk Overwhelms Regulatory Progress
"CoinShares said concerns surrounding Iran had overwhelmed any positive sentiment generated by recent progress on the CLARITY Act"
The timing of the outflows coincided with escalating geopolitical tensions. Bitcoin fell close to the $70,000 mark on Monday after reports that Iran had halted talks with the United States. The largest cryptocurrency dropped about 3% over the past 24 hour period. Separately, Microstrategy (MSTR), the largest holder of bitcoin, sold some of its stack after years of its executive chairman Michael Saylor vowing he would not do so, signaling a shift in institutional conviction.
Selective Inflows Point to Sector Rotation
Not all digital assets saw outflows. Only five digital assets attracted more than $1 million in inflows, down from 11 assets three weeks ago, reflecting a sharp contraction in investor appetite. XRP led with $20.3 million in inflows, followed by Hyperliquid (HYPE) at $10.8 million, and Near at $7.6 million. Despite the weekly outflows, crypto investment products still hold roughly $142 billion in assets globally.
