Investors pulled $1.67 billion from digital asset investment products last week, marking the second-largest weekly outflow recorded in 2026. The mass exit, detailed in a June 1 report from CoinShares, was triggered largely by heightening geopolitical tensions between Iran and Israel, which prompted a broad risk-off sentiment across global markets. This latest retreat brings the total redemptions over the past three weeks to $4.21 billion, effectively erasing a significant portion of the year’s earlier gains.
The sudden exodus of capital has weighed heavily on the industry’s total assets under management (AuM). Global AuM across digital asset products fell from $148 billion to $141 billion during the week, hitting the lowest level seen since early April. This decline suggests that while institutional interest remains substantial, the immediate appetite for crypto exposure is cooling as macroeconomic uncertainty takes center stage.
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Geographically, the selling pressure was almost entirely concentrated in the United States, where investors offloaded $1.63 billion. European markets followed suit but with much lower volumes; Germany saw $25.7 million in outflows, while Sweden recorded $6.6 million in withdrawals. Meanwhile, Hong Kong posted a $4.5 million exit. The Netherlands stood out as the only major market with notable resilience, reporting $1.3 million in net inflows.
Bitcoin and Ethereum face deepest institutional retreats
Bitcoin funds bore the brunt of the market’s frustration, losing $1.44 billion last week. This represents the largest weekly Bitcoin outflow of 2026, surpassing the previous record set during the January selloff. The impact on cumulative performance has been stark: year-to-date Bitcoin inflows have fallen to $1.19 billion, a massive drop from the $2.6 billion reported only one week ago and the $3.9 billion seen two weeks prior.
The market downturn coincided with a rare sale from Strategy (MSTR), the world’s largest corporate holder of the asset. The company offloaded 32 BTC for approximately $2.5 million, a move that drew attention because it followed years of Executive Chairman Michael Saylor vowing he would not sell any of the firm’s stack. While the sale was mathematically small, it coincided with a price drop where Bitcoin fell close to the $70,000 mark on Monday following reports that Iran had halted diplomatic talks with the U.S.
Ethereum losing streak hits ten consecutive sessions
Ethereum products also faced significant pressure, with $257.3 million in weekly outflows. The second-largest cryptocurrency has now extended its losing streak to 10 consecutive sessions, the most sustained period of redemptions for ETH funds since March 2025. Over the last two weeks alone, investors have pulled a combined $471 million from Ethereum vehicles.
The broader market for alternative assets reflects this caution. CoinShares reported that only five digital assets managed to attract more than $1 million in weekly inflows, down from 11 assets just three weeks ago. This shift suggests that many players are entering a waiting period, perhaps viewing the current volatility as a sign that the accumulation phase predicted for early 2026 is now in full effect as major caps stabilize.
XRP and Hyperliquid manage to defy the bearish tide
While the major assets suffered, XRP emerged as a notable outlier, attracting $20.3 million in net inflows. This contributed to a May total of $131.94 million for XRP products, marking the asset’s strongest monthly performance so far in 2026. This growth comes as the XRP Ledger (XRPL) sees a surge in real-world asset (RWA) market capitalization, which rose 124% to $2.25 billion in the first quarter of the year.
The resilience of XRP is bolstered by its underlying network activity. Average daily transactions on the XRPL increased by 35% recently, reaching 2.48 million. This fundamental utility appears to be driving a new liquidity surge that appeals to institutional investors looking for diversified exposure outside of the volatile Bitcoin and Ethereum markets.
HYPE maintains consistent demand amid 11-day streak
Hyperliquid (HYPE) also demonstrated significant strength, recording $10.8 million in fresh capital last week. This marked the 11th consecutive day of inflows for the decentralized exchange tokens. Market data shows that early demand for spot HYPE exchange-traded funds has actually outpaced Bitcoin products when adjusted for market capitalization. Near Protocol followed close behind with $7.6 million in weekly inflows.
Despite the overall $1.67 billion exodus, James Butterfill of CoinShares observed that the environment is reminiscent of the bearish cycle seen in early 2026, which lasted five weeks. The central question for the coming weeks is whether the current $141 billion in total assets under management will hold steady or if geopolitical shocks will continue to drive the risk-off positioning that characterized the end of May.