Digital asset investment products record a second consecutive week of redemptions, as the US bond market stifles hopes of rate cuts.
Bitcoin ETF funds suffered their worst week of 2026 in terms of outflows, with investors pulling back from digital asset products as the American bond market signals interest rates set to remain elevated for longer. According to CoinShares data, digital asset investment products recorded $1.47 billion in outflows for the week ending May 25, 2026 – the second consecutive week of redemptions and the third-highest weekly outflow of the year.
Bitcoin funds led the investor exodus, with a net outflow of $1.32 billion – the worst weekly figure of the year for BTC. The 11 US-listed spot Bitcoin ETFs alone recorded outflows of $1.26 billion, following the already significant $1 billion outflow from the previous week. Ethereum funds also suffered, with $223 million withdrawn by investors, while ETFs on other altcoins saw a material slowdown in flows.
The outflows occurred as bond traders increased their bets that the Federal Reserve will keep interest rates elevated under new chairman Kevin Warsh. The clearest signal comes from the US Treasury yield curve: the spread between 2-year and 10-year yields widened by more than 12 basis points during the week, with the 2-year yield – more sensitive to rate expectations – rising at a faster pace. The spread between 5-year and 30-year yields also widened, sending the same message to the market: financing costs will remain elevated in the near term.
High interest rates have historically tended to discourage risk assets, penalizing in particular emerging technologies such as cryptocurrencies and zero-yield assets like Bitcoin. According to analysts, investors may be reallocating capital toward upcoming IPOs – most notably SpaceX’s, potentially the largest ever – and toward commodities, which are rising due to tensions over oil flow through the Strait of Hormuz.
