U.S. Crypto ETFs Lead $1.73B Weekly Outflows as Rate-Cut Repricing Pressures Bitcoin and Ethereum

The headline isn’t just “prices down, flows out.” The sharper point is U.S. investors are repricing the “debasement trade” as rate-cut hopes fade, and that repricing is flowing through ETFs at speed.

Digital asset investment products saw $1.73 billion in outflows last week, the largest since mid-November 2025. Bitcoin products led with $1.09 billion in redemptions; Ethereum vehicles shed $630 million. Total assets under management now sit near $178 billion. In contrast, Solana-linked products attracted $17.1 million.

The read-through is straightforward: softer expectations for imminent policy easing, negative momentum, and frustration that the inflation-hedge narrative hasn’t delivered near-term offset have pulled capital back—particularly in the U.S., which accounted for nearly $1.8 billion of the withdrawals. Europe and Canada were more selective. Switzerland (+$32.5 million), Germany (+$19.1 million), and Canada (+$33.5 million) added exposure, while Sweden (-$11.1 million) and the Netherlands (-$4.4 million) saw modest outflows. XRP-linked products lost $18.2 million; smaller inflows appeared in products tied to Binance and Chainlink.

Spot prices reflect the same macro drag. Bitcoin trades around $87,620, down roughly 5.5% over seven days, while Ethereum sits near $2,900 after a 9.5% weekly slide. Over the last 24 hours, about $720 million in positions were liquidated, with ~$465 million from longs—classic pro-cyclical pressure as momentum traders de-risk.

One thing to focus on: the U.S.-centric flow reflex. U.S. ETFs offer daily creation/redemption, tight spreads, and heavy retail-adjacent distribution. That mix tends to accelerate response to macro narratives. When the market leans toward fewer or later rate cuts, the “store-of-value-now” pitch feels less urgent, and ETF flows can quickly swing negative—even if on-chain activity or developer progress hasn’t broken. Several industry leaders argue the recent downdraft reflects macro expectations, not faltering crypto usage; that view aligns with the regional divergence, where non-U.S. investors used weakness to add.

There’s a psychological element too. After a strong run, investors often anchor to high prints, then react sharply when momentum flips, especially in vehicles that lower friction to sell. That doesn’t indict the thesis; it highlights how product design shapes behavior. Business-wise, issuers are learning that education around time horizons and risk framing matters as much as fee compression. Ethically, marketing the “digital gold” idea without caveats invites disappointment during tightening cycles; more nuanced messaging—hedge potential over cycles, not weeks—would set healthier expectations.

For portfolio construction, the signal isn’t that the asset class has failed; it’s that ETF-driven participation can amplify macro swings. When the rates narrative softens again, the same pipes can reverse quickly. Until then, expect U.S. flow sensitivity to dominate tape action while selective non-U.S. buyers nibble into weakness.

Entering February, some executives expect bearish sentiment to persist but with less aggression than last week. That feels reasonable given how much de-risking has already passed through liquid vehicles. Watch the policy path, not just price prints; in this market regime, the former continues to steer the latter.