Crypto Exodus Hits $1.7 Billion but Tokenized Metals Draw Investor Inflows

Investor sentiment toward digital assets has taken a decisive turn lower, with crypto funds recording $1.7 billion in weekly outflows last week. It marks a second consecutive week of withdrawals and reversing year-to-date inflows into a net $1 billion outflow. Investors Turn Defensive as Short Bitcoin and Tokenized Metals Attract Capital After $1.73 billion outflows from crypto funds the week ending January 23, digital asset investment products lost $1.69 billion last week. The latest pullback has also accelerated a broader contraction in assets under management (AuM). Since peaking in October 2025, total AuM across digital asset products has fallen by $73 billion. This reflects both sustained price weakness and persistent capital flight from the sector. CoinShares analyst James Butterfill points to a combination of factors behind the downturn. The head of research cites: The appointment of a more hawkish US Federal Reserve Chair Ongoing whale selling is tied to the four-year crypto cycle and Heightened geopolitical volatility has pushed investors toward safer assets. It explains why outflows were overwhelmingly concentrated in the US, which accounted for $1.65 billion of the total weekly withdrawals. “We believe this reflects a combination of factors, including the appointment of a more hawkish US Federal Reserve Chair, continued whale selling associated with the four-year cycle, and heightened geopolitical volatility,” wrote Butterfill. The scale of the US exodus highlights the sensitivity of crypto markets to shifts in Federal Reserve expectations and broader financial conditions. Elsewhere, sentiment was similarly negative, albeit on a smaller scale. Crypto Fund Flows by Country. Source: CoinShares Broad-Based Outflows Highlight Defensive Shift in Crypto Markets Across individual assets, the sell-off was broad-based. Bitcoin bore the brunt of the withdrawals. It shed $1.32 billion over the week as investors reduced exposure to the pioneer crypto, potentially ...