From Drought to Downpour: The $530M Outflow and Swift Comeback in DeepSeek

The DeepSeek announcement

Investment in digital asset products witnessed total inflows of $527 million last week. However, intraweek flows indicated variable investor sentiment, primarily driven by broader market anxieties, including the DeepSeek announcement, which resulted in $530 million in outflows on Monday.

In spite of this initial drop, the market bounced back with over $1 billion in inflows later in the week. With $44 billion in inflows recorded in 2024, $5.3 billion in year-to-date (YTD) inflows, and considerable price surges, CoinShares indicated that the current sell-off is not unexpected.

XRP Emerges as Leading Altcoin

According to CoinShares’ Digital Asset Fund Flows Weekly Report, BTC underwent inflows of $486 million last week, while short-Bitcoin investments experienced a second consecutive week of inflows, amounting to $3.7 million. Ethereum, conversely, finished the week with net-zero flows but ran into difficulties earlier, likely due to its increased exposure to the technology sector and worries about global economic growth.

XRP has surfaced as the second-best performer, with year-to-date inflows hitting $105 million, which includes $15 million from last week. Overall, altcoins noted positive inflows, with Solana drawing in $4.5 million, followed by Chainlink at $3.1 million and Cardano at $1 million. Nevertheless, Litecoin faced a slight outflow of $0.2 million.

In the meantime, multi-asset investment products experienced nearly $9 million in inflows over the previous week, reflecting ongoing investor interest in diversified digital asset portfolios. Furthermore, blockchain equities have attracted $160 million in year-to-date inflows as investors perceive the recent price slump as an opportunity to acquire assets.

Canada Encounters Setback

Regarding regional inflows, the US topped the chart with a complete week of investments amounting to $474 million, contributing to a year-to-date inflow of $5 billion. A similar pattern was noted in Europe, where digital asset products drew $78 million last week, which propelled the total YTD inflows to $93 million.

Among European countries, Switzerland recorded the highest inflows at nearly $58 million, followed by Germany with $22.3 million. Conversely, Sweden experienced outflows of $3.6 million.

Other regions also reported positive inflows. For example, Brazil documented $15.8 million in inflows, while Hong Kong added $2.3 million during the same timeframe. Australia registered a modest inflow of $0.1 million.

Nonetheless, Canada faced considerable outflows of $43 million, potentially due to apprehensions regarding potential US trade tariffs.