Digital asset investment products posted their first weekly outflows in four weeks, shedding a combined $952 million.
The reversal in fund flows followed renewed regulatory uncertainty linked to delays in advancing the US Clarity Act.
Market sentiment weakened as institutions reassessed exposure amid a lack of progress on federal digital asset legislation.
Analysts said stalled policymaking has revived concerns about oversight, compliance obligations, and enforcement risks.
Weekly flow data showed selling pressure was amplified by fears of continued liquidation from large crypto holders.
We believe this reflected a negative market reaction to delays in passing the US Clarity Act, which has prolonged regulatory uncertainty for the asset class, alongside concerns over continued selling by whale investors.
James Butterfill said.
With momentum fading, analysts now doubt digital asset ETP inflows in 2025 will exceed those recorded last year.
Total assets under management across crypto investment products currently stand at $46.7 billion.
This compares with $48.7 billion in total assets under management recorded at the end of 2024.
The United States accounted for $990 million of total outflows, highlighting its outsized influence on global fund movements.
In contrast, investors in other regions appeared more constructive despite broader market volatility.
The divergence suggests US-listed institutional products are more sensitive to domestic regulatory uncertainty.
The Clarity Act is intended to establish a clearer federal framework for digital assets across the United States.
Its delayed progress has prolonged ambiguity around registration rules and the division of authority between regulators.
For institutions bound by strict compliance requirements, this uncertainty has translated into reduced market exposure.
Ethereum (CRYPTO:ETH) led weekly outflows with $555 million, reflecting its heightened sensitivity to US regulatory outcomes.
Market participants view Ethereum as particularly exposed to definitions distinguishing digital commodities from securities.
Despite recent losses, Ethereum year-to-date inflows remain strong at $12.7 billion.
This compares with $5.3 billion of total inflows recorded across the whole of 2024.
Bitcoin (CRYPTO:BTC) followed with $460 million in weekly outflows, testing its perceived status as a regulatory safe haven.
Bitcoin’s year-to-date inflows stand at $27.2 billion, below the $41.6 billion recorded last year.
Not all assets declined, with Solana (CRYPTO:SOL) and XRP (CRYPTO:XRP) recording inflows, signalling selective investor confidence.
At the time of reporting, Ethereum price was $3,054.87.