Cryptocurrency exchange-traded products (ETPs) faced a tough week as investor sentiment soured amid DeepSeek panic and broader market concerns, limiting weekly inflows to just $527 million. This marked a drastic 72% drop in inflows compared to the $1.9 billion seen in the previous week, according to CoinShares’ Feb. 3 report.
The decline in ETP inflows was largely driven by heightened volatility linked to DeepSeek, China’s emerging AI platform, and fears surrounding a potential global trade war. These concerns were further amplified by U.S. President Donald Trump’s push for stricter tariffs on imports. CoinShares’ research director, James Butterfill, stated that the DeepSeek news alone contributed to $530 million in outflows on Jan. 27.
Despite the overall downturn, XRP emerged as one of the few bright spots, with $14.5 million in weekly inflows. XRP is now the second-best-performing altcoin in ETPs, bringing its year-to-date (YTD) inflows to $105 million. In comparison, Bitcoin (BTC) led the charge, seeing $486 million in inflows, contributing to its YTD total of $4.9 billion.
Ethereum (ETH)-based ETPs, however, saw zero inflows, alongside Litecoin (LTC), as investors pulled back amid market uncertainty. Meanwhile, Grayscale and Bitwise crypto ETPs faced significant outflows, with Grayscale seeing $298 million in outflows, a sharp increase of 140% from the previous week.
The volatility also coincided with market reactions to Jim Cramer’s comments on Bitcoin, made on CNBC’s Mad Money on Jan. 27, which led to further selling pressure. The controversy, dubbed the “Inverse Cramer Effect,” reflects the market’s tendency to respond negatively to Cramer’s recommendations.
Also Read: What is DeepSeek? China’s AI Challenger That’s Disrupting Tech Giants
Additionally, multiple European exchanges delisted Tether (USDT) in line with new local regulations, contributing to the heightened uncertainty in the crypto market. As these dynamics unfold, crypto investors remain
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses. cautious, awaiting more clarity in the coming weeks.
About The Author
