XRP Outshines Amid $240 Million Crypto Outflows Due to Trade War Fears

By: Isha Das

In the face of turbulent market conditions, digital asset investment products experienced a significant $240 million in outflows last week. This marked a stark shift in investor sentiment that had previously seen two consecutive weeks of substantial inflows amounting to $870 million. The recent outflows have been attributed to growing concerns over a looming global trade war, heightened by new tariffs imposed by the United States. These tariffs have sparked retaliation from countries like China, causing considerable instability in global markets and reigniting fears of a potential economic downturn.

Bitcoin, which is often considered the flagship cryptocurrency, bore the brunt of this market reaction with $207 million in outflows. Despite this withdrawal, Bitcoin's year-to-date inflows have remained robust at $1.3 billion, showcasing some resilience amid broader market challenges. CoinShares, in its latest report, indicated that although there was a general decline in assets under management, the overall stability of digital assets marked by total AUM at approximately $133 billion was noteworthy. This stability contrasted with traditional equities, like the MSCI World Index, which saw significant declines within the same period.

Amid this market volatility, XRP emerged as a standout performer. While major cryptocurrencies such as Ethereum, Solana, and Sui observed net negative flows, XRP recorded $4.7 million in inflows. The digital asset has amassed $173 million in new funds this year, boosted by speculation around a potential spot XRP ETF in the U.S. and optimism toward a clearer regulatory environment. Furthermore, Toncoin also reported a positive inflow of $1.1 million, signaling investor interest despite market uncertainties.

The broader market concerns stemmed not only from trade war fears but also from the adjustments being made by investors as they navigate the unpredictable global economic landscape. As a response, there has been a noticeable shift in investment strategies, with some digital assets gaining preference due to their perceived resilience and potential for regulatory clarity. As such, the crypto market continues to exhibit dynamic behavior as it adapts to external economic stimuli and investor expectations.