It will be difficult for crypto bulls.
Crypto exchange-traded products (ETPs), including ETFs, have fallen out of favor with investors as the US financial market signals higher-for-longer interest rates.
Digital asset investment products recorded $1.47 billion in outflows last week, the second consecutive week of redemptions and the third-largest weekly outflow in 2026, according to CoinShares.
Bitcoin funds led the charge, dropping $1.32 billion in their biggest weekly outflow of the year. The 11 US-listed spot bitcoin ETFs alone saw outflows of $1.26 billion last week, following the previous week’s outflow of $1 billion. Investors withdrew $223 million from ether (ETH) funds.
Other altcoin ETFs also saw a significant moderation in flows.
“Cumulative outflows over the two weeks now stand at $2.54 billion, suggesting that the Iran-related risk-off has deepened and widened despite continued progress on the CLARITY Act,” said James Butterfill, head of research at CoinShares, in a report shared with CoinDesk.
The outflow came as bond market traders increased bets that the Federal Reserve will keep interest rates higher under new Chairman Kevin Warsh.
Their positioning is evident from the section of the financial market curve, identified by the spread between two- and 10-year yields, which widened by over 12 basis points last week.
The two-year rate is more sensitive to interest rate expectations, so the widening of the spread, driven by a faster rise in the two-year rate, implies expectations of increased borrowing costs in the short term. Similarly, the gap between five- and 30-year yields also widened, flashing similar expectations.
Rising interest rates often discourage riskier asset classes, especially weighing on new technologies like cryptocurrencies and zero-yielding assets like bitcoin.
Taken together, the outflow and yield curve signals paint a bearish picture for risk assets. Investors may be reallocating capital to upcoming IPOs, notably SpaceX’s, which could be the biggest ever, and to commodities, which are rallying amid disruptions to oil flows through the Strait of Hormuz.
Upcoming releases of US inflation data, including the Fed’s preferred gauge, core PCE, due on Thursday, could clarify the market path. Pay attention!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
What is trending
Today’s signal
The chart shows daily fluctuations in the relationship between the US dollar prices of bitcoin and gold.
The ratio has been rising since March, indicating BTC outperformance relative to gold, and at the time of writing it is holding onto the bullish trendline support. A bounce from here would mean a continuation of the rally.
Conversely, if the support breaks, it signals a resumption of the broader BTC bear market.
