The digital asset investment sector has been grappling with a historic downturn, with outflows extending into their fifth consecutive week.
According to a report published by CoinShares on 17 March, cryptocurrency investment products saw $1.7 billion in outflows last week alone. This brings the total outflows since 7 February to a record-breaking $6.4 billion.
Exchange-traded products (ETPs) that hold cryptocurrencies like Bitcoin ($BTC), Ethereum ($ETH), and Solana ($SOL) have suffered the most. CoinShares’ report suggests that this large-scale selling is driven by concerns over inflation, global trade tensions, and other economic factors.
Bitcoin has been hit particularly hard. Last week alone, investors pulled $978 million from Bitcoin funds, adding to the total five-week outflows of $5.4 billion.
At one point, Bitcoin’s price dropped to $77,000, a four-month low, before recovering to $83,000. However, analysts believe that further price increases could be difficult due to ongoing market pressure.
“I think we are close to the bottom”, said the Head of Research at CoinShares, James Butterfill. “It’s too early to say for sure, but we might be near peak bearishness”, he added.
Investor confidence has also been affected by recent economic reports. The University of Michigan’s latest survey showed consumer sentiment dropping to its lowest level since November 2022.
Analysts believe this could push the US Federal Reserve to lower interest rates, which might help boost crypto prices in the future.
Bitcoin takes the biggest hit in the sell-off
Bitcoin investment products have seen the worst outflows in this sell-off. Over the past five weeks, Bitcoin-related exchange-traded products have lost a total of $5.4 billion. Last week alone, investors withdrew $978 million.
Even though Bitcoin has managed to climb back to $83,127, it has struggled to break through the $85,000 resistance level.
Analysts have pointed out that a large number of leveraged trader positions exist in the $84,000 to $85,000 range, which could make price movements unstable.
Ethereum and Solana have also seen major losses. Ethereum investment products lost $175 million last week, while Solana-related products saw $2.2 million in outflows.
Interestingly, XRP ($XRP) has been an exception to this trend. Unlike other cryptocurrencies, $XRP investment products actually saw inflows of $1.8 million, meaning that investors have been adding money rather than pulling it out.
Meanwhile, the impact of these outflows has been felt across major exchanges and fund managers.
Binance, one of the largest crypto exchanges, suffered a massive setback when a key seed investor pulled out, leaving the exchange with only $15 million in total assets under management.
Additionally, investments in blockchain-related companies have taken a hit, with $40 million in outflows recorded last week.
This shows that the decline isn’t just affecting cryptocurrencies but the wider blockchain industry as well.
US leads in outflows as major firms suffer
The CoinShares report also highlighted that most of these massive withdrawals are happening in the United States.
The US accounted for 93% of all outflows last week, with investors withdrawing $1.16 billion from digital asset funds. Switzerland also saw significant outflows, with $528 million leaving the market.
Germany, however, was the only country to record inflows, bringing in $8 million.
Some of the biggest investment firms have been affected by this downturn. European crypto investment firm 21Shares reported the highest amount of withdrawals, with $534 million pulled out from its products.
BlackRock, one of the largest financial institutions investing in crypto, also experienced heavy outflows. In the past week alone, investors withdrew $401 million from BlackRock’s crypto investment products. So far this month, BlackRock’s total outflows have reached $594 million.
Despite these widespread losses, a few firms have managed to avoid outflows. ProShares, for example, recorded $2 million in inflows for the month, making it one of the few asset managers still attracting investments.
BlackRock and ARK Invest are also managing to hold onto positive year-to-date investment flows, despite the overall market decline.
Strategy moves closer to holding 500K BTC
While most investors have been selling off their crypto assets, one company is still buying. Strategy (formerly known as MicroStrategy), one of the largest corporate Bitcoin holders, recently added 130 $BTC to its portfolio, spending about $10.7 million.
This purchase, however, is the smallest one Strategy has made since it began buying Bitcoin in 2020.
The company now holds a total of 499,226 $BTC, purchased at an average price of $66,360 per Bitcoin. This means it is just 774 $BTC away from reaching a total holding of 500,000 BTC.
However, Strategy’s Bitcoin yield has fallen to 6.9%, significantly below its 15% target for 2025. This suggests that despite its large holdings, the company is not making as much profit as expected.
Strategy’s Bitcoin purchases have also become much smaller compared to its previous acquisitions, likely reflecting a more cautious approach due to ongoing market uncertainty.
Even though Bitcoin’s price dropped below $80,000 last week, Strategy’s latest purchase was much smaller than its past buys. Before this, the smallest Bitcoin purchase Strategy had made was 169 $BTC in August 2024.
So far in 2025, Strategy has spent $4.4 billion on Bitcoin purchases, leading to a year-to-date gain of $2.6 billion. However, the company is still far from its target of a $10 billion Bitcoin gain by the end of 2025.
At the end of 2024, Strategy’s total Bitcoin profit was $13.8 billion, with a Bitcoin yield of 74%. Given the current market downturn, the company’s ability to meet its financial targets remains uncertain.
With five straight weeks of heavy outflows, the crypto market is under significant pressure. Many investors are pulling their money out of digital asset products, with Bitcoin and Ethereum taking the biggest hits.
While some analysts believe the market is nearing the bottom, the uncertainty around inflation and global economic conditions makes it difficult to predict what will happen next. A key factor that could influence the market is the upcoming US Federal Reserve policy meeting.
Although no major changes are expected, the central bank will release updated projections on employment and inflation, which could impact investor sentiment.
For now, Bitcoin’s price remains below key resistance levels, and the broader crypto investment market continues to see more money leaving than coming in. Whether this trend will reverse in the coming weeks remains to be seen.
