U.S. Leads Crypto Market Exodus Amid Tariff & Inflation Concerns
Crypto Market Hit by Second Week of Heavy Outflows
Global cryptocurrency investment products witnessed a second consecutive week of capital outflows, with investors pulling $508 million, according to the latest weekly reports. This downturn follows an 18-week streak of inflows totaling $29 billion, largely driven by investor enthusiasm after Donald Trump’s election victory in November 2024.
Growing concerns over U.S. trade tariffs, inflation, and monetary policy have been identified as key factors driving investors away from the crypto market. Additionally, weekly trading volumes have dropped sharply, falling from $22 billion two weeks ago to just $13 billion last week, indicating a significant shift toward risk aversion.
Bitcoin Takes the Biggest Hit as U.S. Leads Outflows
Bitcoin suffered the heaviest losses, with outflows reaching $571 million. However, some traders hedged against further declines, as short-Bitcoin investment products saw inflows of $2.8 million.
The U.S. accounted for the bulk of the capital flight, with outflows totaling $560 million. Major institutional players, including Grayscale, Fidelity, Ark 21Shares, and Bitwise, all recorded individual outflows exceeding $100 million.
In contrast, European investors appeared more confident. Germany and Switzerland attracted inflows of $30.5 million and $15.8 million, respectively, indicating a divergence in regional investor sentiment. Meanwhile, Hong Kong, Canada, and Brazil experienced only minor outflows, each under $3 million.
XRP Gains Favor Amid ETF Speculation
While Bitcoin struggled, XRP emerged as the standout altcoin, attracting $38.3 million in inflows last week. Since mid-November 2024, XRP has seen total inflows of $819 million, reflecting renewed investor interest.
Market analysts attribute this surge to speculation that the U.S. Securities and Exchange Commission (SEC) may drop its lawsuit against Ripple. Additionally, growing optimism surrounding a potential spot XRP exchange-traded fund (ETF) in the U.S. is fueling further capital inflows.
Altcoins Show Resilience as Solana and Ethereum Attract Capital
Beyond XRP, other major altcoins also experienced positive inflows:
- Solana (SOL): $8.9 million
- Ethereum (ETH): $3.7 million
- Sui (SUI): $1.47 million
As market uncertainty lingers, investors continue to reassess their portfolios, with a clear shift toward altcoins showing resilience against macroeconomic headwinds.
this crash is brutal