$1 Billion Floods Back Into Crypto Funds, Takes Five Weeks To Hemorrhage $4B

CoinShares reported a turnover of 1 billion dollars, driven by the purchase of Bitcoin and renewed interest in capital markets.

Investment products tied to digital assets recorded $1 billion in revenue last week, reversing a five-week run of $4 billion in outflows. CoinShares said no single macro event explains the change. Instead, previous price softness, technical deterioration, and renewed buying activity among Bitcoin’s biggest holders appear to have supported the rebound.

Market participants have recently focused more on identifying buying opportunities than on reversing their exposure.

Global Crypto Funds Recovery

According to the latest edition of CoinShares’ Digital Asset Fund Flows Weekly Report, weekly fund flows were dominated by Bitcoin, which brought in $881 million. At the same time, short Bitcoin products pulled in $3.7 million. Ethereum pulled in $117 million, its strongest weekly performance since mid-January, although both assets remain in full outflows for the year.

Solana, on the other hand, has posted $53.8 million in the week and $156 million in the year to date. Chainlink earned $3.4 million last week, while XRP and Sui added $1.9 million and $0.4 million, respectively. Multi-asset products were the only segment to see a divestment, with $6 million coming out.

Regionally, sentiment was consistent. The United States led the way with $957 million in new investments. Canada, Germany and Switzerland added $34.1 million, $31.7 million, and $28.4 million, respectively. Hong Kong recorded $6.8 million, while Brazil brought in $3.2 million.

Geopolitical Shock

As the ETF flowed last week, there was a sharp deterioration in geopolitical conditions. On Monday, the crypto markets remained largely tied amid the country’s growing tensions, particularly involving Iran. The first US strike on Iran over the weekend pushed Bitcoin to around $63,000 and Ethereum below $2,000 before prices returned to normal trading ranges.

About $300 million of long positions were liquidated when the news broke, a significant but contained amount, which, according to QCP Capital, suggests that positions had already been reduced in the days before the event. The company noted that this may also mean that investors are treating Bitcoin less as a “weekend macro hedge” and are considering alternatives such as token gold, which trades 24/7 and has seen increasing interest to reduce risk.

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Options markets showed an increase in short-term volatility but were moderately reactive, indicating that traders may be well-positioned for potential volatility given the warning signs over the past week. QCP pointed to a similar event last June, when BTC ran into geopolitical issues but recovered and later rallied. Options flow data also revealed buyers of call contracts expiring later in March, consistent with some participants preparing to re-barre.

“Although the price action looks positive, we remain cautious as tensions and uncertainty continue to rise. The conflict is still in its early stages, and it is too early to conclude whether it will continue or evolve into a regional conflict involving other Gulf states.”