Investors Withdraw from Digital Assets Amid Economic Uncertainty
In recent weeks, there has been a notable exodus of investors from the realm of digital assets, driven primarily by increasing geopolitical tensions and economic instability. According to a report from CoinShares, global digital asset funds experienced a staggering outflow of $1.7 billion just last week, contributing to a total of $6.4 billion in withdrawals over the span of five weeks. This trend highlights a growing caution among investors regarding the volatility of the cryptocurrency market.
In the United States, the situation is particularly concerning for bitcoin (BTC) exchange-traded funds (ETFs), which have now recorded their longest streak of weekly outflows since their introduction in January 2024. Over the past five weeks, investors have withdrawn more than $5.4 billion from these funds, signaling a significant shift in sentiment.
Although former President Donald Trump has expressed support for cryptocurrencies, notably through initiatives like the establishment of a Bitcoin Strategic Reserve, such endorsements have not been sufficient to alleviate investor fears. Ongoing concerns related to tariff-induced trade tensions and the implications of monetary policy continue to loom large over the market.
As a result of these factors, bitcoin has seen a decline of more than 21% over the last three months, currently hovering around $83,000. Meanwhile, the broader CoinDesk 20 Index (CD20) has suffered even greater losses, shedding approximately 34.6% of its value during the same period. This downturn underscores the challenges facing digital assets as they navigate an increasingly uncertain financial landscape.
