Crypto investment products saw $1.67 billion in withdrawals last week, marking a continued trend of outflows and a significant drop in assets under management.
Investment products linked to cryptocurrencies experienced significant outflows of $1.67 billion from May 25 to 29, continuing a negative trend that has now persisted for three weeks, according to CoinShares. This recent withdrawal brings the total outflow since mid-May to $4.21 billion, marking one of the largest drops this year.
The assets under management fell from $148 billion to $141 billion, the lowest level observed since early April. Bitcoin was particularly affected, suffering $1.43 billion in withdrawals — its largest weekly outflow in 2026. Year-to-date inflows for Bitcoin products have dropped to $1.2 billion from $3.9 billion just two weeks prior.
Ethereum funds also faced challenges, with a loss of $257 million. Interest in altcoins diminished, with only a few seeing considerable inflows, notably XRP ($20.3 million), Hyperliquid ($10.8 million), and NEAR ($7.6 million).
Regionally, the United States accounted for the majority of outflows, totaling $1.63 billion, followed by Germany ($25.7 million), Sweden ($6.6 million), and Hong Kong ($4.5 million).
Shifts in Investment Strategies
As cryptocurrency hedge funds grapple with declining returns amid stagnant Bitcoin prices and reduced DeFi activity, there is a widening gap between successful managers and those unable to adapt. Passive ownership of major digital assets is no longer yielding profits; instead, funds with diversified portfolios are thriving. Digital Asset Capital Management pointed to Hyperliquid, Morpho, and Zcash as examples of strong performers.
Researcher Amir Hadjian from Keyrock mentioned that the crypto landscape is maturing, with capital increasingly directed to projects with tangible products and revenue, leading to a decline in support for weaker assets. He noted that 85% of tokens launched in 2025 are currently trading below their initial prices.
Institutional investors are becoming more selective regarding fund structures and risk management. There is a noticeable shift towards market-neutral strategies, on-chain storage, custodial services, and tokenized treasury products. According to the Crypto Insights Group, market-neutral strategies have shown a 2.15% increase this year, unlike directional funds that have seen a 5.4% decline.
Industry experts foresee consolidation, as nearly 78% of crypto funds manage less than $50 million. Without a bullish market trend, many funds may struggle to meet operational costs. Analysts predict that in the upcoming year, the number of active funds will decrease while the remaining ones will likely manage larger capital pools, as smaller entities either merge with larger firms or exit the market amid rising competition from ETFs.
It’s noteworthy that the previous week, from May 18 to 22, net outflows from cryptocurrency investment funds reached $1.47 billion.
