According to the Kobeissi Letter, crypto funds are seeing major outflows, with $2 billion pulled out last week alone—the largest withdrawal since February. Over the past three weeks, total outflows have reached $3.2 billion.
Bitcoin led the way with $1.4 billion withdrawn, while Ethereum followed with $689 million. These withdrawals, combined with falling prices, have cut total assets under management by 27% to $191 billion, a situation described as a “structural decline.”
Market sentiment remains negative. Analyst Lark Davis notes that Bitcoin is in a bear market as long as it stays below the 50-week exponential moving average, which is just above $10,000. He questions whether this is a major downturn or a smaller one like the dip in April.
Davis outlines three possible scenarios: a steep drop with no recovery (which he thinks is unlikely), a short-term rally followed by a sharp fall, or Bitcoin reclaiming the 50-week EMA by year-end if economic conditions improve.
Adding to the concerns, SwanDesk CEO Jacob King warned that if Bitcoin drops a few more percentage points below $80,000—the average purchase price for Michael Saylor’s firm, Strategy—it could trigger forced liquidations and push prices toward $10,000. King criticized past investment hype around Bitcoin, recalling when Saylor encouraged extreme measures like taking double mortgages to buy crypto.
Currently, Bitcoin is trading at $84,700, more than 30% below its October peak of $126,000.
Frequently Asked Questions
Of course Here is a list of helpful and clear FAQs about cryptocurrency fund outflows designed for both beginners and more advanced users
Beginner Definition Questions
1 What does cryptocurrency fund outflow mean
It means that more money is being taken out of investment funds that hold cryptocurrencies than is being put in In this case investors pulled out a net 3 billion over three weeks
2 What kind of funds are we talking about
Primarily large regulated funds like ExchangeTraded Funds hedge funds and institutional investment products that allow people to invest in crypto without directly buying and holding the coins themselves
3 Is 3 billion a lot of money in the crypto world
Yes its a significant amount While the total crypto market is valued in the trillions a sustained outflow of billions of dollars indicates a major shift in investor sentiment and can impact prices
Causes Reasons
4 Why are investors pulling money out of crypto funds
Common reasons include
Fear of risk Investors might be worried about falling prices and want to protect their money
Economic factors Things like rising interest rates or inflation can make risky assets like crypto less attractive
Negative news Regulatory crackdowns or bad news from a major crypto company can spook investors
Profittaking After a period of growth some investors cash out to lock in their gains
5 Does this mean people are losing faith in cryptocurrency
Not necessarily It often reflects a shortterm change in strategy or reaction to current events rather than a longterm rejection of the technology The crypto market is known for its high volatility and cycles of inflows and outflows
Impact Consequences
6 How do these outflows affect the price of Bitcoin and Ethereum
Large outflows can increase selling pressure When funds need to return cash to investors who are leaving they often have to sell some of the crypto they hold which can push prices down
7 Is this a sign that the crypto market is crashing
Its a sign of a bearish trend and a market downturn but not necessarily a fullblown crash It indicates that confidence is low in the short term Markets often go through these cycles