The cryptocurrency market has faced yet another major setback, with exchange-traded products (ETPs) recording a staggering $2.9 billion in outflows last week—marking the largest weekly withdrawal on record. The trend extends a broader three-week sell-off, bringing total outflows to $3.8 billion, according to a report from CoinShares on March 3.
What’s Driving the Sell-Off?
Market analysts point to a combination of factors fueling this massive exodus:
- The $1.5 billion Bybit hack, which rattled investor confidence and raised concerns over crypto security.
- Hawkish sentiment from the U.S. Federal Reserve, hinting at tighter monetary policies, which typically dampens interest in risk assets.
- Profit-taking after a 19-week inflow streak, during which $29 billion poured into crypto ETPs.
James Butterfill, head of research at CoinShares, noted that these factors contributed to both profit-taking strategies and growing uncertainty in the asset class.
Bitcoin Takes the Biggest Hit
As the dominant asset in crypto ETPs, Bitcoin (BTC) bore the brunt of the sell-off, recording $2.6 billion in outflows last week alone. This trend has been ongoing, with month-to-date Bitcoin outflows reaching $3.2 billion. On the flip side, short Bitcoin ETPs saw minor inflows of $2.3 million, suggesting that some traders are betting on further declines.
Ethereum (ETH), the second-largest crypto by market cap, also suffered $300 million in outflows, although its month-to-date inflows remain positive at $490.3 million.
Sui (SUI) and XRP Defy the Trend
While the overall market struggled, Sui (SUI) emerged as the biggest winner, attracting $15.5 million in inflows. XRP-based ETPs followed closely behind, with $5 million in inflows, indicating that some investors remain bullish on select altcoins.
Total Assets Under Management Drop Below $140 Billion
With this massive outflow, total assets under management (AUM) in crypto ETPs have dropped to $138.8 billion, down from their historic high of $173 billion in January 2025.
What’s Next for Crypto ETPs?
The ongoing uncertainty in the market raises questions about whether outflows will continue or if a rebound is on the horizon. With Bitcoin struggling to hold key support levels and institutional investors taking a more cautious approach, the coming weeks will be critical in determining the direction of crypto ETPs.
For now, traders and investors remain on high alert, watching for macroeconomic signals, regulatory developments, and Bitcoin’s next move in what has become one of the most volatile periods for digital assets in 2025.
