$1.43B Exodus: Digital Assets Face Heaviest Weekly Pullback Since Q1 as Fed Uncertainty Reshapes Market Sentiment

Digital asset investment products saw their most significant weekly redemptions in months, with $1.43 billion flowing out of the sector last week, CoinShares data reveals. The timing proved critical: a roller-coaster week of macro-driven sentiment shifts sent exchange-traded product volumes surging to $38 billion—roughly double the year-to-date average—as investors toggled between risk-off and risk-on positioning.

The week’s narrative split cleanly into two acts. Early losses were steep: roughly $2 billion left crypto investment vehicles as market participants braced for a prolonged hawkish stance from the Federal Reserve on interest rate policy. The turning point came mid-week when Federal Reserve Chair Jerome Powell delivered remarks at the Jackson Hole Symposium that leaned more accommodative than consensus had anticipated. That dovish tilt triggered a late-week reversal, pulling in $594 million and cushioning what could have been a far deeper rout.

Bitcoin Absorbs the Largest Hit, Yet Year-to-Date Picture Remains Complicated

Bitcoin products absorbed the brunt of redemptions, with $1 billion flowing out during the week. The largest cryptocurrency remains under pressure from macro crosscurrents and investor uncertainty about near-term price direction. On a month-to-date basis, Bitcoin has shed another $1 billion in net inflows, signaling diminishing conviction among fund allocators. More strikingly, year-to-date inflows have reached only 11% of Bitcoin’s total assets under management—a notable underperformance relative to competing assets in the digital space.

Ethereum Defies the Broader Pullback, Capturing 26% Inflow of Its Total AUM

Ethereum proved surprisingly resilient against the same headwinds, limiting losses to $440 million despite the weekly turmoil. Mid-week institutional buying momentum—likely sparked by the same dovish Fed signals that spooked Bitcoin markets—reversed the initial pessimism. The result: Ethereum posted $2.5 billion in month-to-date inflows, sharply contrasting Bitcoin’s losses. More tellingly, Ethereum attracted inflows representing 26% of its total assets under management, suggesting stronger institutional belief in the asset’s fundamentals and its positioning within decentralized finance infrastructure and staking ecosystems. The divergence hints that sophisticated investors may be rotating toward Ethereum as the clearer beneficiary of a softer monetary policy environment.

Altcoins Chart Starkly Different Paths: Winners and Losers Emerge

Alternative tokens painted a bifurcated picture. XRP led the charge with $25 million in inflows, trailed by Solana’s $12 million and Cronos with $4.4 million inflows. These flows suggest institutional appetite remains selective, rewarding projects with established track records, active developer ecosystems, and proven market infrastructure.

Conversely, newer tokens stumbled. SUI recorded the sharpest reversal, bleeding $12.9 million in outflows, while TON products saw $1.5 million exit. The split outcome underscores a market recalibrating toward quality and maturity—a flight to safety that emerges whenever macroeconomic clouds gather on the horizon.