From May 25 to 29, investment products based on digital assets saw outflows totaling $1.67 billion. According to a report from CoinShares, this negative trend has persisted for three consecutive weeks.

Weekly inflow trends in crypto funds. Source: CoinShares.

The total outflow over the past three weeks has reached $4.21 billion. This latest outflow marks the second largest in 2026. Assets under management have dropped from $148 billion to $141 billion, the lowest level since early April.

The primary impact was on Bitcoin, with investors withdrawing $1.43 billion from Bitcoin-based instruments. This is the largest weekly outflow for the cryptocurrency this year. Year-to-date inflows into Bitcoin products have decreased to $1.2 billion, down from $3.9 billion two weeks ago.

Weekly capital distribution by asset. Source: CoinShares.

Ethereum funds lost $257 million. Interest in altcoins also waned, with only five assets seeing inflows exceeding $1 million. These included: XRP ($20.3 million), Hyperliquid ($10.8 million), and NEAR ($7.6 million).

Regionally, the U.S. led the outflows with $1.63 billion. Withdrawals were also recorded in Germany ($25.7 million), Sweden ($6.6 million), and Hong Kong ($4.5 million).

Weekly capital distribution by region. Source: CoinShares.

Strategy Shift

In 2026, cryptocurrency hedge funds faced declining returns amid Bitcoin stagnation and reduced activity in the DeFi sector. Experts noted an increasing gap between profitable managers and those unable to adapt to the new conditions.

This year, passive ownership of major crypto assets has ceased to be profitable. Only funds with diversified portfolios have succeeded. For instance, Digital Asset Capital Management highlighted Hyperliquid, Morpho, and Zcash tokens as key growth drivers.

Keyrock researcher Amir Hadjian emphasized that the crypto industry is undergoing a period of "maturation." Capital is flowing into projects with real products and revenue, while weaker assets are losing support. According to him, 85% of tokens launched in 2025 are trading below their opening price.

Institutional investors are becoming more discerning about fund structures, risk management methods, and governance mechanisms. Instead of buying altcoins, they are opting for:

  • market-neutral strategies (arbitrage, yield in DeFi);
  • on-chain storage and custodial services;
  • tokenized treasury products and RWA.

According to Crypto Insights Group, market-neutral strategies have gained 2.15% since the beginning of the year, while directional funds have lost 5.4%.

The industry anticipates a wave of consolidation. About 78% of crypto funds manage less than $50 million. Without a bullish trend, these structures will struggle to cover operational costs through fees.

Analysts predict that in a year, the number of active funds will decrease, while the average capital under management of the remaining players will increase. Smaller firms will either be absorbed by larger companies or exit the market due to increasing competition from ETFs.

Recall that from May 18 to 22, cryptocurrency-based investment funds recorded an outflow of $1.47 billion.