Crypto ETP inflows dive amid market concerns and DeepSeek panic

Cryptocurrency exchange-traded products (ETPs) witnessed a significant decline in inflows, garnering only $527 million last week, a sharp 72% drop from the $1.9 billion recorded in the previous week, as reported by CoinShares on February 3. The downturn in investor sentiment was attributed to concerns over China’s AI platform DeepSeek and apprehensions of a global trade war due to President Donald Trump’s push for stricter import tariffs.

CoinShares research director James Butterfill highlighted that the news surrounding DeepSeek alone triggered $530 million in outflows on January 27. Despite the overall market unease, Bitcoin ETPs managed to attract $486 million in inflows, contributing to a year-to-date total of $4.9 billion. Short-Bitcoin products experienced their second consecutive week of inflows, albeit reduced by 27% to $3.7 million.

In contrast, Ether-based ETPs did not fare as well, with no new inflows last week, a situation mirrored by Litecoin ETPs. However, since the beginning of 2025, ETH ETPs have seen inflows amounting to $177 million.

XRP investment products, on the other hand, continued to see positive movement, with $14.5 million in weekly inflows, making it the second-best-performing altcoin in ETPs with year-to-date inflows reaching $105 million.

The week also saw intensified selling activity in crypto investment products by Grayscale Investments and Bitwise. Grayscale experienced a substantial increase in outflows at $298 million, marking a 140% rise from the previous week’s $124 million. This brings Grayscale’s year-to-date outflows to $690 million. Bitwise’s exchange-traded funds were not spared, with outflows skyrocketing over 560% to $126 million.

BlackRock (NYSE:BLK)’s crypto ETFs also felt the impact of market volatility, with inflows slowing by 58% to $918 million, down from $1.4 billion the week before.

Additional factors contributing to the market’s volatility included public statements by Jim Cramer, who on January 27 advocated for Bitcoin ownership on CNBC’s Mad Money, and the delisting of Tether (USDT) by multiple European Union exchanges in response to new local crypto regulations.

These developments, alongside the broader market concerns, have played a role in shaping the current landscape of cryptocurrency ETP inflows.

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