Short Bitcoin funds attracted $14.5 million in inflows as investors hedge against falling prices.
Investors pulled $1.7 billion from digital asset investment products this past week. This has reversed year-to-date gains and left a net $1 billion outflow globally. CoinShares stated that the decline reflects weaker investor confidence, influenced by a more hawkish US Federal Reserve Chair, continued selling by crypto whales linked to the four-year cycle, and rising geopolitical risks.
Since October 2025, when prices reached their highs, total assets under management in digital assets have fallen by $73 billion, amidst a sharp drop in market appetite for the sector.
Bitcoin Leads Massive Outflows
According to the latest edition of CoinShares’ Digital Asset Fund Flows Weekly Report, investor sentiment was broadly negative across digital assets. Bitcoin, for one, experienced $1.32 billion in outflows, Ethereum $308 million, XRP $43.7 million, and Solana $31.7 million. Meanwhile, Sui and Litecoin had smaller exits of $1.2 million and $0.2 million.
Short Bitcoin funds saw inflows of $14.5 million, which raised their year-to-date AuM by 8.1%. Multi-asset funds also saw withdrawals of $13.5 million. Chainlink stood out as an exception after drawing a modest $0.5 million in inflows.
Amid broader outflows, CoinShares found that hype investment products gained $15.5 million, as a result of strong on-chain demand for tokenized precious metals.
Sentiment was mostly negative across regions. The US had $1.65 billion in outflows, with Canada and Sweden seeing $37.3 million and $18.9 million exits. Smaller withdrawals came from the Netherlands, France, and New Zealand. On the other hand, Switzerland and Germany attracted inflows of $11 million and $4.3 million, while Brazil, Australia, and Italy saw minor gains.
High Demand For Downside Protection
Bitcoin broke below the $80,000 support level and briefly touched $74,500, while ETH also fell under pressure shortly after the announcement of Kevin Warsh as the next US Federal Reserve Chair. The move triggered liquidation of over $2.5 billion in leveraged long positions, worsening sentiment already strained by ongoing ETF outflows. This has left Bitcoin with its fourth consecutive monthly decline, and markets are generally cautious.
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QCP Capital said that $74,500 is an important level because it aligns with the 2025 cycle lows. Options markets indicate that investors remain careful, and there is more demand for downside protection than for upside bets.
However, hedging demand is not as extreme as during prior stress episodes, which could mean that some investors may be positioning for a potential near-term base. QCP observed that while the price appears to be stabilizing, momentum is still weak, and upside is limited, which has left Bitcoin vulnerable to further liquidations.
According to QCP, a drop under $74,000 could drive BTC further down, with the potential to test its previous 2024 trading zone. On the flip side, breaking back above $80,000 may relieve short-term pressure, normalize options markets, and ease volatility. Important factors to watch include institutional accumulation, geopolitical risks, and Fed communications.
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