Digital asset investment products faced $415 million worth of withdrawals throughout the period from February 7 to February 14 2025 because investors became less positive about these products.
CoinShares’ weekly market report indicates this period represents the initial negative flow to follow nineteen consecutive weeks of inflows. Market participants pulled out $415 million from investment products because the U.S. Federal Reserve Chair Jerome Powell adopted an aggressive stance and Consumer Price Index readings exceeded expectations causing investors to lose faith in cryptocurrencies.
Crypto exchange-traded products involving digital asset investment products continued their positive trend of inflows as other Bitcoin and altcoins markets fell throughout previous months according to the report.
Bitcoin Faces Sharp Losses
Cryptocurrency investments collected $29.4 billion during their 19-week inflow period which exceeded the total of $16 billion from January 2024 after U.S. spot exchange-traded funds received regulatory approval. Recent fund withdrawals indicate a changing market momentum which contradicts the previous positive trends among investors.
“We believe these outflows were triggered by the Congressional meeting with Fed Chair Jerome Powell, who signalled a more hawkish monetary policy stance, coupled with U.S. inflation data exceeding expectations,” Butterfill said.
The majority of investors withdrew their funds due to macroeconomic indicators. The ongoing inflation pressures within CPI data started to worry investors about extended monetary policy tightening by the Federal Reserve thus reducing risk asset demand including cryptocurrencies.
The hawkish statements from Powell strengthened market uncertainty as he indicated future rates would continue to rise. The changing market forecast made many investors leave digital assets because they anticipated a drawn-out period of reduced monetary accessibility.
Bitcoin Withdrawals Affect Market Trends
According to James Butterfill who leads research at CoinShares, the recent fund withdrawals stopped an unprecedented 19-week period where investments grew after U.S. elections. The broader market fluctuations did not diminish institutional investors’ interest in cryptocurrencies because they received an additional boost from spot ETF approvals that produced inflows.
Investor attitudes indicate substantial sensitivity toward economic changes because recent fund withdrawals demonstrated their ability to react swiftly. The United States lost the highest volume of funds at $464 million but other areas of the market showed stability. Germany combined with Switzerland together with Canada attracted digital currency investments worth $21 million, $12.5 million and $10.2 million respectively.
The offline crypto markets showed negligible reaction to both Federal Reserve monetary policy tightening and Consumer Price Index reporting because local investors maintained positive digital asset expectations. Value of Bitcoin experienced its major depletion when $430 million left the Bitcoin asset. Short-Bitcoin products experienced a combined withdrawal of $9.6 million capital.
Ethereum lost $7 million from its markets yet its overall position remained better than Bitcoin’s. Solana (SOL) and XRP demonstrated market strength through $8.9 million and $8.5 million of incoming funds. The digital assets attracted positive market momentum because U.S. spot ETF applications were developed which increased investor interest in particular cryptocurrencies.
Investors kept investing in altcoins particularly Solana and XRP during this period even when other cryptocurrency markets experienced outflows because they maintained interest in particular blockchain projects.
