Investment capital flow into digital assets recorded a net outflow of 223 million USD, ending a streak of 14 consecutive weeks of inflows, with Bitcoin experiencing the largest withdrawal and Ethereum continuing to be a bright spot attracting capital.
Despite starting the week with strong inflows, investor sentiment quickly reversed after the hawkish statement from the Federal Reserve, causing the cryptocurrency market capitalization to drop sharply and selling pressure to increase broadly.
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The week ending on 2/8, the net outflow from digital asset investment products reached 223 million USD, after 14 consecutive weeks of net inflows.
Negative sentiment stems from the Fed's tightening monetary message, causing the cryptocurrency market capitalization to drop by 9.48% (equivalent to 370 billion USD).
Bitcoin experienced the largest sell-off with a net outflow of 404 million USD, while Ethereum attracted 133.9 million USD, and BlackRock increased purchases despite the general trend.
Why did the capital flow into digital assets reverse sharply in the first week of August?
The net outflow from digital asset investment products reached 223 million USD in the week ending on 2/8/2025, marking the first reversal of capital flow since 14 consecutive weeks of inflows, according to CoinShares data.
The investment capital flow into digital assets reversed sharply after 14 consecutive weeks of increases, negatively impacting the market and highlighting immediate macro risks.
James Butterfill, Head of Research, CoinShares, report for the week of 2/8/2025
The report recorded a favorable start to the week with 883 million USD flowing into digital asset investment products, but investors quickly turned away after the Fed's action. This reversal also came with the total cryptocurrency market capitalization dropping by 9.48% in just a few days, similar to the sharp decline at the end of April 2024.
According to expert opinions, institutional investors are increasingly responding quickly and decisively to signals from the Fed and macroeconomic fluctuations, especially in the context of prolonged high interest rates.
What factors are causing a reversal in cryptocurrency investment sentiment?
The main factor leading to the rapid and strong sell-off was the hawkish report from the US Federal Open Market Committee (FOMC) on 30/7/2025, stating that "Inflation remains quite high." This warning raised concerns that the Fed would continue to maintain or raise interest rates, unfavorable for risk assets like cryptocurrencies.
After the FOMC report indicating high inflation, it is understandable that investors reduce risk. This scenario typically causes capital to flow out of the digital asset market into safer products.
Michael Sonnenshein, CEO of Grayscale Investments, responds to Bloomberg on 31/7/2025
Immediately after the Fed's statement, US investors sold 383 million USD in digital asset products during the week, pushing the total outflow since the beginning of the month close to 1 billion USD (974 million USD according to CoinShares), the highest since the beginning of the year. Additionally, investors from Germany, Sweden, and Brazil also increased their selling, totaling 81 million USD.
Compared to the steady inflow over more than three months prior, this capital withdrawal indicates a close relationship between global macro policies and the heat of digital asset products.
How is Bitcoin affected by this capital withdrawal?
Bitcoin continues to be the focal point of the largest sell-off, with a net outflow of 404 million USD in the week, nearly half of the outflow for the entire month (totaling 844 million USD withdrawn). This indicates a clear shift in capital away from Bitcoin.
The selling pressure surrounding Bitcoin reflects a general cautious sentiment, as institutional investors quickly reduce exposure to highly volatile assets amid inflation and interest rate risk.
Antoni Trenchev, Co-founder of Nexo, market analysis on 2/8/2025 (source: Nexo Blog)
Compared to Altcoins like Sui or Litecoin (which only saw around 1 million USD withdrawn each), Bitcoin's capital outflow is significant in both historical correlation and market scale. This somewhat reveals Bitcoin's weakness in the eyes of financial institutions amid the ongoing global economic instability.
Not only has the market capitalization decreased, but data from CoinShares also shows that the risk-averse sentiment is very evident through the quick actions of large investment funds, shifting away from some high-risk assets like Bitcoin.
How did Ethereum become a bright spot amidst the pressure of capital withdrawal?
In stark contrast to Bitcoin, Ethereum was a bright spot in the market last week as it continued to attract a net inflow of 133.9 million USD, marking the 15th consecutive week of being favored by institutional capital.
The continuous capital flow into Ethereum investment products shows that investors expect the long-term development potential of the Ethereum ecosystem with strong technological updates and practical applications.
Raoul Pal, Founder of Real Vision, commented on 2/8/2025, source: personal Twitter
The phenomenon of investors prioritizing Ethereum reflects a change in risk appetite: many institutions are interested in the potential of DApp, DeFi, and NFT platforms on Ethereum as well as the number of Layer 2 and Layer 3 projects that are developing strongly. CoinShares data confirms that the total value of capital accumulated in Ethereum in 2025 has increased continuously for 15 weeks, despite profit-taking trends in Bitcoin or other Altcoins.
Some experts believe that Ethereum's gradual shift to Proof of Stake (PoS), reduced transaction fees, and improved scalability are significant reasons attracting capital from long-term institutions in the context of an unstable market.
How do other major Altcoins (SOL, XRP, ADA) benefit?
Despite the strong fluctuations in the overall market, major Altcoins like Solana, Ripple, and Cardano recorded a total of 41 million USD in additional capital from institutional funds, indicating that capital is still seeking opportunities in major foundational projects outside of Bitcoin.
Solana stands out as a prominent representative in the high-performance Layer 1 group, highly regarded by many investment funds for its speed and low fees. Ripple continues to attract capital after expanding its cross-border payment segment. Cardano benefits from a strong development community and a clear technology development roadmap. According to Messari's analysis (August 2025 report), the momentum of capital flow into quality Altcoins largely comes from the diversification of investment appetite and long-term confidence in the growth of each separate blockchain ecosystem.
The emergence of new capital in the top Altcoin group helps the market avoid a contraction of capital flows around the largest coins, while also promoting diversification opportunities for institutional investors.
BlackRock goes against the market, actively buying Bitcoin and Ethereum
While most institutional funds sold Bitcoin ETF and Ethereum products, BlackRock took a counter-movement with active buying. Data shows that Bitcoin ETF (iShares Bitcoin Trust) and Ethereum (iShares Ethereum Trust) by BlackRock attracted 355.3 million USD and 394.2 million USD last week, respectively.
BlackRock's continued accumulation of Bitcoin and Ethereum during the market's strong correction proves its long-term vision and considers this an opportunity to gather assets at a low price.
Eric Balchunas, ETF Expert, Bloomberg Intelligence, comments on 5/8/2025
However, the overall trend remains capital outflows, as just in one day, Bitcoin ETFs saw sell-offs totaling 323.5 million USD, along with Ethereum ETFs recording their largest daily outflow ever (according to CoinGlass data). Thus, BlackRock remains a rare bright spot maintaining an accumulation stance despite the market's strong fluctuations.
Many analysts believe that BlackRock's move is a long-term strategy, taking advantage of deep corrections to increase the proportion of key assets, which could set the stage for a new bullish cycle when the market turns optimistic again. This also exemplifies the strong divergence in strategies among major investment institutions in the global digital asset market.
Bitcoin ETF (Week ending 2/8) Ethereum ETF (Week ending 2/8) Notable Strategy BlackRock +355.3 million USD +394.2 million USD Accumulation buying despite market decline Other institutions (average) -323.5 million USD (in one day) Largest single-day outflow in history Strong selling, reducing short-term risk
How does the selling pressure from Bitcoin ETF and Ethereum affect prices and the overall market?
Data from CoinGlass confirms the strong selling trend of cryptocurrency ETFs, especially in the first week of August. In just one day, Bitcoin ETFs recorded 323.5 million USD sold, while Ethereum ETFs reached a record outflow in a single day.
The strong outflow of capital from ETF products puts pressure on the cash market to absorb a large supply, easily causing downward price pressure at times. However, total assets under management (AUM) for digital asset products remain stable at 215 billion USD, indicating that this may only be a temporary adjustment rather than a reversal of the long-term trend.
Experts believe that the tug-of-war between short-term sell-offs and the long-term accumulation strategy of some large institutions like BlackRock helps the market avoid a prolonged massive sell-off, while creating a new price level more appropriate to the scenario of high interest rates and rising macro risks.
The long-term outlook: temporary pullback or trend reversal?
Although withdrawal pressure dominates in the short term, many data points show that the assets under management of cryptocurrency investment products remain stable around 215 billion USD. This partly reinforces the view that large funds see this as a short-term adjustment, not a reversal of the trend of increasing capital into digital assets as seen from the beginning of the year.
The cryptocurrency market remains attractive in the long run due to continuous technological innovation; we assess that each strong correction is an opportunity to restructure the portfolio, not a signal to end the institutional investment trend.
Katie Stockton, Founder of Fairlead Strategies, commented on CNBC on 3/8/2025
The history of capital adjustments in cryptocurrency ETFs shows that after strong withdrawal phases, capital tends to return when the macro context is more favorable. Long-term interest in platforms like Ethereum, Solana, and Cardano is evidence of the potential combination of technology, practical application, and optimal investment portfolios of institutional funds.
The current picture shows that the main risks still lie in macro factors and the monetary policy direction of the United States. If there are signals of easing interest rates or declining inflation, the digital asset market could quickly recover capital flows back to leading investment products.
Comparing investment capital flows and the performance of digital asset products in the first week of August 2025
The comparison table below helps visualize the capital flow dynamics and the reactions of institutional investors across different types of major digital asset products:
Investment Products Capital Flow Weekly (million USD) Cumulative since the beginning of August (million USD) Market Price Performance Bitcoin ETF (global) -404 -844 Sharp decline, high volatility Ethereum ETF (global) +133.9 Continuous increase for 15 weeks Stable, attracting institutional capital Solana/Ripple/Cardano (ETF) +41 (cumulative) — Positive, new capital inflow Sui/Litecoin -1 (each) — Very slight impact
Important lessons from the capital withdrawal wave in August 2025
The strong net outflow in early August 2025 is clear evidence of the almost absolute dependence of institutional capital flows on major macro signals and monetary policy. The actions of large ETFs, especially BlackRock going against the market, indicate that the DeFi market has become an inseparable part of the global financial system.
Investing in digital assets today, especially for large or institutional investors, is not only based on technical indicators or short-term fluctuations but also influenced by important macro factors such as monetary regulation, inflation, and global market confidence. Early identification of these signals helps investors be more proactive in risk management and optimize their portfolios.
The widespread sell-off last week also sent a clear message about the market's sensitivity and vigorous reaction when instability factors arise; it also highlighted the clear differences in asset allocation strategies between large institutions and individual investors.
What steps can help mitigate risks before capital flow fluctuations?
Proactively forecasting interest rate fluctuations, updating macro scenarios, and applying proactive risk management are key solutions recommended by ETF investment experts for institutions participating in the cryptocurrency market today.
Diversifying portfolios, prioritizing practical blockchain platforms, and exploiting pullback or accumulation opportunities during strong corrections is also a way to optimize long-term effectiveness without being entirely driven by emotions during extreme market phases.
Frequently asked questions
Why did the digital asset market experience a strong capital outflow in early August 2025?
The main reason is the spillover effect following the Fed's hawkish message on inflation, combined with short-term risk-averse sentiment amid global economic fluctuations and sustained high interest rates.
How do Bitcoin and Ethereum differ in capital flow trends?
Bitcoin experienced the largest sell-off with a net outflow of 404 million USD, while Ethereum continues to be favored by institutional investors, attracting a net inflow of over 133.9 million USD, reflecting a clear distinction in risk appetite.
What is BlackRock's role in this volatility?
BlackRock goes against the general trend by actively buying Bitcoin ETF and Ethereum, indicating a long-term accumulation perspective and seizing opportunities to gather assets when many other funds reduce their exposure due to short-term risks.
Do heavily sold Bitcoin ETF and Ethereum affect prices drastically?
The strong capital outflow from ETFs creates short-term downward price pressure; however, total managed capital remains stable at 215 billion USD, and the market has not experienced a prolonged massive sell-off.
How is capital flowing into major Altcoins like Solana, Ripple, and Cardano?
This group recorded a total of 41 million USD in new capital from institutional funds, reflecting confidence in the development of their ecosystems and the trend of diversifying investment portfolios.
How to optimize investments when the market is highly volatile?
Proactively updating macro information, focusing on allocating to quality assets, diversifying, and combining proactive risk management is the most recommended solution by experts.
Is this a signal to end the trend of institutional investment in cryptocurrencies?
Currently, most experts believe this is just a temporary adjustment; long-term investors still believe in the long-term attractiveness of blockchain technology/digital asset markets.
Source: https://tintucbitcoin.com/bitcoin-rut-rong-ethereum-van-hut-von/
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