Crypto Funds Bleed Again: Three Shocks Investors Missed

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Well, the crypto funds have seen their biggest weekly exodus since mid-November 2025, tossing out a neat $1.73 billion. The air across crypto markets is as risk-off as a riverboat gambler in a fog, and three forces are driving the retreat.

The sheer breadth of withdrawals reads like a ledger from a man drifting downstream without a paddle-confidence is still on the lam. All the while, stubborn macro uncertainty and the fading yarns about crypto’s role as a hedge keep the boat from turning back.

Crypto Outflows Reached $1.73 Billion Last Week: What You Need to Know

According to the latest CoinShares reckonin’, the selling spree was mostly concentrated in the US, amounting to nearly $1.8 billion of the total exodus.

On the asset ledger, the retreat ran wide as a rural road, with Bitcoin heading the crowd, plucking out about $1.09 billion in outflows.

Notably, that was the largest outflow into Bitcoin products since mid-November 2025. It hints that sentiment hasn’t thawed yet from the price whiplash we saw in October.

Short-Bitcoin investment products pulled in a mite of inflows, about $0.5 million. Still, the tilt suggests defense rather than any conviction-backed bearish bet.

Ethereum followed not far behind, with $630 million in outflows, while XRP saw a more modest $18.2 million leave investment products.

Together, the numbers say the selling pressure ain’t tied to a single tale or coin. It’s a broader re-tuning of crypto exposure across portfolios. Yet there were pockets that kept their heads above water.

“Solana bucked the current with inflows of $17.1 million, while others saw modest inflows, notably Binance ($4.6 million) and Chainlink ($3.8 million),” the report says.

These allocations clue us that pockets of the market still have a pulse, especially for investors chasing relative strength or ecosystem-specific sparks.

Three Core Forces Shaping Investor Behavior

Notably, last week’s fund flows mark a sharp turn from what markets saw the week ending January 17. BeInCrypto notes that crypto funds had inflows of up to $2.17 billion, with Bitcoin leading the charge.

Against this backdrop, James Butterfill, head of research at CoinShares, points to three stubborn forces driving the crypto exodus.

  • Waning hopes for rate cuts

First, the thinning hopes for interest-rate cuts have gnawed away at one of crypto’s chief bullish macro tailwinds. The CME FedWatch Tool shows markets pricing a meager 2.8% chance that the Fed will cut rates.

As the timetable for monetary easing grows, speculative assets, including digital assets, have faced renewed pressure-especially from institutional allocators sensitive to real yields and liquidity conditions.

  • Negative price momentum

Second, negative price momentum continues to reinforce bearish positioning. The failure of major cryptos to establish sustained upside since the October 2025 drawdown has kept trend-following and risk-managed strategies on the sideline.

It has been 109 days since the 10.10 Binance’s oracle crash last year.

Crypto market has never been recovered since then.

– leongo (⛓️🌳💧🔥🌎) (@L3O_NGO) January 26, 2026

This somber mood would amplify crypto outflows during every possible period of weakness.

  • Crypto’s failure to capture the debasement trade

Third, Butterfill notes growing disappointment that digital assets have not yet joined the debasement trade.

Despite persistent fiscal deficits, elevated government borrowing, and concerns about long-term currency dilution, crypto has yet to reclaim its narrative as a hedge against monetary debasement decisively.

Butterfill says this prompts some investors to question its near-term role in diversified portfolios.

“Dwindling expectations for interest rate cuts, negative price momentum, and disappointment that digital assets have not participated in the debasement trade yet have likely fueled these outflows,” the CoinShares executive wrote.

Together, the latest outflows mark a market still searchin’ for a catalyst. Until macro expectations shift, price momentum steadies, or crypto reasserts its macro relevance, crypto funds may keep their hats in the wind.

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2026-01-26 15:01