Investors Flee Crypto in $1.7 Billion Weekly Exodus, Seek Refuge in Tokenized Metals

LONDON – The cryptocurrency market is witnessing a significant defensive rotation, with investment products bleeding $1.7 billion in a single week. The outflows, concentrated in U.S.-based funds, mark a stark reversal from earlier inflows and underscore growing investor anxiety over monetary policy and global instability.

The scale of the withdrawal is substantial. Following $1.73 billion in outflows the prior week, an additional $1.69 billion exited last week, turning the year-to-date flow into a net negative of roughly $1 billion. Since a peak in October 2025, total assets under management (AuM) for crypto funds have contracted by a staggering $73 billion, a combination of falling prices and sustained capital flight.

"The market is reacting to a perfect storm of headwinds," said James Butterfill, Head of Research at CoinShares. "Investors are primarily spooked by the Federal Reserve's renewed hawkish posture, which is strengthening the dollar and tightening financial conditions. This is compounded by elevated geopolitical risks, leading to a classic 'risk-off' move away from volatile digital assets."

Bitcoin (BTC) bore the brunt of the selling pressure, with outflows hitting $1.32 billion for the week. Ethereum (ETH) followed, shedding $308 million, indicating a broad-based loss of confidence even in core holdings. Altcoins like XRP and Solana were not spared, recording outflows of $43.7 million and $31.7 million, respectively.

However, the flight to safety created clear winners. Short-Bitcoin investment products attracted $14.5 million, suggesting traders are hedging against further declines. More notably, products linked to tokenized precious metals—often grouped under thematic or "Hype" categories—saw inflows of $15.5 million. This niche segment is gaining traction as a narrative around tangible, inflation-resistant assets resonates during market stress.

"The data paints a clear picture: capital is exiting speculative crypto bets and searching for havens," noted market strategist Anya Petrova. "Tokenized gold and silver are benefiting from a dual narrative—they offer blockchain efficiency but are backed by a physical, centuries-old store of value. In uncertain times, that's a powerful combination."

The near-term outlook remains clouded. Analysts suggest sentiment may hinge on upcoming U.S. economic data, a slowdown in selling from large holders, and any de-escalation in geopolitical hotspots.

Market Voices

Sarah Chen, Portfolio Manager at Horizon Digital Assets: "This is a healthy correction and a re-pricing of risk. The inflows into tokenized commodities show sophisticated capital is still here; it's just rotating. The infrastructure for real-world assets on blockchain is proving its worth in a downturn."

Marcus Thorne, independent crypto trader: "It's a bloodbath driven by macro, plain and simple. The Fed has the wheel again, and crypto is the first asset class thrown overboard. The tiny inflows into 'digital gold' are a distraction—this is a wholesale risk-off event. Until the macro picture changes, we're in defense mode."

Dr. Evelyn Reed, Financial Technology Professor: "The trend toward tokenized metals is significant beyond the weekly flows. It validates a broader convergence of traditional finance and digital assets. During stress tests, we see which use cases have durability. Digital ownership of physical assets appears to be one of them."