The cryptocurrency market is undergoing a historic capital withdrawal as crypto investment products witnessed a record outflow of $3.8 billion in just three consecutive weeks, according to the latest report from CoinShares.

This sharp decline occurs against the backdrop of Bitcoin facing significant pressure, with over $2.5 billion lost from investment funds just last week. So what is behind this exodus? Can the market recover quickly?

Record Withdrawals: What is Happening?

According to the report from #CoinShares , just last week, $2.9 billion was withdrawn from crypto investment funds, marking the largest capital withdrawal ever recorded in history.

🔹 Bitcoin is the asset most heavily impacted with $2.5 billion withdrawn, although $2.3 million still flowed into short Bitcoin positions.

🔹 The most affected regions:

  • The U.S. leads with $2.9 billion withdrawn from the market.

  • Switzerland lost $73 million.

  • Canada lost $16.9 million.

  • Germany went against the trend, with $55.3 million flowing into crypto, showing a different investment perspective among regions.

This comes after 19 consecutive weeks of attracting capital, with total inflows reaching $29 billion – indicating a strong reversal.

Reasons Behind the Strong Capital Outflow

📌 James Butterfill, head of research at CoinShares, pointed out several main reasons affecting the market:
✔️ The recent Bybit exchange hack, shaking investor confidence.
✔️ The U.S. Federal Reserve (FED) has a tougher stance, putting pressure on the financial market in general.
✔️ The previous prolonged growth, with 19 consecutive weeks of capital inflows, may have led investors to take profits.

In addition, the announcement from President #DonaldTrump regarding the U.S. Multi-Asset Crypto Reserve Fund has also caused mixed reactions.

U.S. Crypto Reserve Fund: Ambiguity or Long-Term Strategy?

Immediately after CoinShares' report was released, Trump announced the establishment of a strategic crypto reserve fund. According to James Butterfill, this could improve investor sentiment and encourage traditional funds to enter the crypto market.

However, the decision to include assets other than Bitcoin in the reserve fund is controversial.

📌 Butterfill noted:
➡️ Bitcoin is a fixed-supply asset, which can help hedge against inflation.
➡️ Other types of crypto resemble technology investments more than actual reserve assets.

Some experts like Ki Young Ju, CEO of CryptoQuant, have even offered bolder perspectives. He argues that:

🗣 "The crypto market is increasingly becoming a strategic tool for the U.S."
🗣 "After Trump is re-elected, global ethical standards are declining. If something benefits Trump and serves U.S. national interests, it will no longer be seen as illegal."

This raises the question of whether the U.S. is trying to control the global crypto market and absorb foreign capital through new policies.

Will the Market Recover or Continue to Decline?

Although capital is fleeing, with the White House taking an interest in crypto at a strategic level, there may be positive moves to help the market recover.

📌 Factors that may help reverse the capital withdrawal trend:
✔️ Supportive crypto policies from the U.S. government.
✔️ The establishment of a clearer legal framework for the market.
✔️ New investment flows from traditional funds.

With the Crypto Conference at the White House on March 7, where Trump is expected to make an important speech, we can expect clearer signals about the future of the market.

💡 What do you think about this record capital withdrawal? Is it just a short-term adjustment or a sign of a long-term trend? 🚀 #anhbacong