Crypto Funds Face Third Consecutive Weekly Losses, Totaling $3 Billion In Outflows
Overview
Crypto-focused funds are facing significant challenges, experiencing their third consecutive week of outflows totaling $3.2 billion. This trend highlights a concerning decline in market confidence, particularly affecting major cryptocurrencies like Bitcoin and Ethereum.
Outflows from Crypto Funds
Recent analysis from the Kobeissi Letter has revealed a troubling trend in capital markets, particularly for crypto-focused funds. Last week alone saw a substantial outflow of $2 billion, marking the largest withdrawal since February. This has extended a worrying streak of outflows, bringing the total to $3.2 billion over the past three weeks.
Withdrawals from Leading Cryptocurrencies
The primary driver of these outflows is Bitcoin, which recorded withdrawals amounting to $1.4 billion. Ethereum also faced significant withdrawals, totaling $689 million. The impact of these outflows is reflected in the average daily outflows as a percentage of assets under management (AuM), which have reached unprecedented levels.
Declining Assets Under Management
As a result of these substantial outflows and declining prices, total assets under management in the crypto market have decreased by 27%, now standing at $191 billion. The Kobeissi Letter has characterized this situation as a “structural decline.”
Market Sentiment and Analysis
Market sentiment remains largely negative, especially concerning Bitcoin. Expert Lark Davis has analyzed current trends using key moving averages. He indicated that Bitcoin remains in a bear market as long as it trades below its 50-week exponential moving average (EMA), which is currently positioned just above the $10,000 mark. Davis has raised questions regarding whether the ongoing downturn indicates a “big bear” market or a “mini bear,” referencing a previous decline in April where Bitcoin, despite losing the 200-day EMA, did not breach the 50-week EMA.
Potential Scenarios for Bitcoin
Davis proposed three possible scenarios for Bitcoin’s trajectory in the coming weeks:
- A drastic decline into “goblin town” without recovery, deemed unlikely due to current oversold conditions.
- A short-term rally that tests the 50-week EMA, potentially attracting investors before a sharp downturn.
- A more favorable scenario where Bitcoin could reclaim the 50-week EMA by year-end, driven by improving macroeconomic conditions.
Concerns Surrounding Strategy
Compounding the market’s challenges is the precarious situation of Strategy, previously known as MicroStrategy, led by Bitcoin advocate Michael Saylor. Jacob King, CEO of SwanDesk, expressed concerns that if Bitcoin falls below Strategy’s average buy-in price, the firm could face difficulties with its Bitcoin holdings. This situation raises fears of forced liquidations among crypto investors, which could further drive Bitcoin prices down.
King’s commentary reflects broader skepticism regarding the sustainability of the crypto market’s structure. He criticized Bitcoin investment strategies as being reliant on “unsustainable fraud and hopium,” recalling past statements from Saylor that encouraged extreme measures to invest in Bitcoin.
Impact on the Crypto Market
- Crypto-focused funds have experienced significant outflows, totaling $3.2 billion over three weeks.
- Bitcoin and Ethereum have led these withdrawals, with Bitcoin facing $1.4 billion in outflows.
- Total assets under management in the crypto market have decreased by 27%, now at $191 billion.
- Market sentiment is largely negative, particularly for Bitcoin, which remains below key moving averages.
- Concerns about potential forced liquidations could further exacerbate downward pressure on Bitcoin prices.
- Broader skepticism exists regarding the sustainability of current investment strategies within the crypto market.
Updated: 11/22/2025, 7:20:43 AM
