Key Takeaways
- • Crypto investment products tracked by CoinShares shed $1.7 billion in the week ending May 18, 2026, ending a six-week inflow streak and marking the fifth consecutive week of record outflows totaling $6.4 billion since February 7.
- • Bitcoin ETFs experienced the sharpest outflows, with investors withdrawing $978 million last week as Bitcoin's price fell to a four-month low of $77,000 before recovering to $83,000; Ethereum and Solana funds also faced significant redemptions.
- • President Donald Trump's tariff policies and resulting trade tensions are driving investor risk-off sentiment, with University of Michigan consumer sentiment data hitting its lowest level since November 2022 on Friday.
- • CoinShares Head of Research James Butterfill indicated the market may be approaching peak bearishness, suggesting outflow momentum could soon weaken and potential Federal Reserve rate cuts could support crypto prices through lower borrowing costs.
- • The Fear and Greed Index has recovered modestly from last week's "Extreme Fear" reading of 20 to 32 ("Fear" territory), with prediction market traders forecasting an 80% probability that sentiment will remain above 30 on Tuesday.
Summary
Digital asset investment products are experiencing their worst outflow period on record, signaling deepening institutional investor risk aversion amid macroeconomic headwinds. Exchange-traded products tracking Bitcoin, Ethereum, and Solana lost $1.7 billion in the week ended May 18, according to CoinShares' latest weekly report, breaking a six-week stretch of positive inflows. The cumulative outflows have now reached $6.4 billion since February 7, representing an unprecedented bleed from crypto investment vehicles.
Bitcoin ETFs bore the brunt of redemptions, with $978 million withdrawn last week as the flagship cryptocurrency declined to $77,000—its lowest level in four months. The decline has since partially reversed, with Bitcoin trading near $83,000, though CoinShares Head of Research James Butterfill cautioned that "a lot of resistance" persists from last week's lows, suggesting additional downside risk remains. Ethereum and Solana funds also recorded substantial outflows during the same period, reflecting broad-based selling pressure across major digital asset classes.
The deterioration in crypto demand correlates directly with deteriorating macroeconomic sentiment. President Trump's tariff policies have intensified trade tensions and inflation concerns, with the University of Michigan's latest consumer sentiment survey plunging to its lowest reading since November 2022 on Friday. This erosion in consumer confidence has cascaded into investor positioning, pushing the Fear and Greed Index toward "Extreme Fear" territory with a reading of 20 last week. The index has since recovered to 32 ("Fear" status) as of Monday, with prediction market traders on MYRIAD assessing an 80% probability that sentiment will climb above 30 by Tuesday.
Despite the bearish near-term positioning, Butterfill suggested the market may be approaching an inflection point. He indicated that deteriorating consumer sentiment could prompt the Federal Reserve to cut interest rates soon, a development that could support crypto valuations by lowering borrowing costs across risk asset classes. The U.S. central bank holds its latest policy meeting this week, an event likely to influence investor positioning and potentially arrest the current outflow momentum. Butterfill concluded that while peak bearishness may not yet have occurred, market conditions suggest it is proximate.
Bitcoin ETFs bore the brunt of redemptions, with $978 million withdrawn last week as the flagship cryptocurrency declined to $77,000—its lowest level in four months. The decline has since partially reversed, with Bitcoin trading near $83,000, though CoinShares Head of Research James Butterfill cautioned that "a lot of resistance" persists from last week's lows, suggesting additional downside risk remains. Ethereum and Solana funds also recorded substantial outflows during the same period, reflecting broad-based selling pressure across major digital asset classes.
The deterioration in crypto demand correlates directly with deteriorating macroeconomic sentiment. President Trump's tariff policies have intensified trade tensions and inflation concerns, with the University of Michigan's latest consumer sentiment survey plunging to its lowest reading since November 2022 on Friday. This erosion in consumer confidence has cascaded into investor positioning, pushing the Fear and Greed Index toward "Extreme Fear" territory with a reading of 20 last week. The index has since recovered to 32 ("Fear" status) as of Monday, with prediction market traders on MYRIAD assessing an 80% probability that sentiment will climb above 30 by Tuesday.
Despite the bearish near-term positioning, Butterfill suggested the market may be approaching an inflection point. He indicated that deteriorating consumer sentiment could prompt the Federal Reserve to cut interest rates soon, a development that could support crypto valuations by lowering borrowing costs across risk asset classes. The U.S. central bank holds its latest policy meeting this week, an event likely to influence investor positioning and potentially arrest the current outflow momentum. Butterfill concluded that while peak bearishness may not yet have occurred, market conditions suggest it is proximate.
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