Crypto Funds Lose Billions as Market Fear Grows

The week that ended May saw investors yank a huge chunk of money out of crypto funds, taking the second‑biggest pullback in 2026. A total of $1.67 billion was withdrawn, and over the past three weeks that adds up to more than $4 billion leaving digital asset products.

This streak of redemptions comes as global politics, especially tensions involving Iran, have shaken confidence. Even though the U.S. passed a new crypto law last month, worries about the Middle East dominated headlines and pushed people to pull their money out.

Because of these withdrawals, the total value managed by crypto funds fell from $148 billion to $141 billion, the lowest level since early April. Bitcoin is at the center of this decline: its price slid near $70,000 after news that Iran stopped talks with the U.S. over conflicts in Lebanon. A major bitcoin holder also sold part of its holdings, adding to the pressure on crypto funds.

The United States led the sell‑off, with $1.63 billion drained from crypto products. Germany followed with a smaller exit, while Sweden and Hong Kong also saw withdrawals in the millions.

Bitcoin‑focused funds suffered the biggest loss, dropping $1.44 billion this week – the largest weekly outflow of 2026 so far. Ethereum funds also saw a drop, losing $257 million. On the upside, only five digital assets attracted more than $1 million in new money; XRP topped the list with $20.3 million, followed by Hyperliquid and Near.

Even after these big exits, crypto investment products still hold about $142 billion worldwide. This shows that despite the current uncertainty, many institutional investors keep a stake in the digital asset market.