It's getting tough for crypto bulls.
Crypto exchange-traded products (ETPs), including ETFs, have fallen out of favor with investors as the U.S. Treasury market signals higher-for-longer interest rates.
Digital asset investment products recorded $1.47 billion in outflows last week, the second consecutive week of redemptions and the third-largest weekly outflow of 2026, according to CoinShares.
Bitcoin BTC$77,234.04 funds led the charge, dropping $1.32 billion in their largest weekly outflow of the year. The 11 U.S.-listed spot bitcoin ETFs alone witnessed an outflow of $1.26 billion last week, following the preceding week's $1 billion exodus. Investors pulled $223 million from ether (ETH) funds.
Other altcoin ETFs also experienced a material moderation in flows.
"Cumulative outflows over the two weeks now stand at US$2.54bn, suggesting the Iran-related risk-off has deepened and broadened despite continued CLARITY Act progress," James Butterfill, head of research at CoinShares, said in a report shared with CoinDesk.
The outflows occurred as bond-market traders ramped up bets that the Federal Reserve will keep interest rates higher under new Chairman Kevin Warsh.
Their positioning is evident from the section of the Treasury market curve, identified by the difference between two- and 10-year yields, which grew by over 12 basis points last week.
The two-year yield is more sensitive to interest-rate expectations, so the widening of the spread, driven by a faster rise of the two-year yield, implies expectations of elevated borrowing costs over the near term. Similarly, the gap between five- and 30-year yields also widened, flashing similar expectations.
Elevated interest rates often disincentivize riskier asset classes, especially weighing on emerging technologies like cryptocurrencies and zero-yielding assets like bitcoin.
Taken together, the outflows and yield curve signals paint a bearish picture for risk assets. Investors may be redeploying capital into impending IPOs, especially SpaceX, which could be the biggest ever, and into commodities, which are rallying amid disruptions to oil flows through the Strait of Hormuz.
Forthcoming U.S. inflation data releases, including the Fed’s preferred gauge, core PCE, due on Thursday, could clarify the market trajectory. Stay alert!
Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."
What’s trending
- Brent crude climbs as Iran vows retaliation against ceasefire violations after U.S. military strikes (CNBC): Brent crude oil rose Tuesday as U.S. military operations in southern Iran and President Donald Trump’s mixed messaging on the negotiations kept traders on edge. The U.S. military said it “conducted self-defense strikes in southern Iran today.”
- Russia threatens strikes on Kyiv defence sites, urges foreigners to leave (Reuters): Russia said it plans to launch "systematic strikes" on targets in Kyiv linked to the Ukrainian military as well as decision-making centers. It urged foreigners to leave the city, a day after one of its heaviest bombardments since the start of the war.
- At $322 billion, the stablecoin market value exceeds the FX reserves of 95 nations (CoinDesk): The combined market value of all stablecoins is bigger than the FX reserves of Poland, Thailand, Mexico as well as developed economies such as the U.K., Canada and the oil-rich UAE.
- Hyperliquid takes a swing at Polymarket with macro outcome bets (CoinDesk): Hyperliquid is competing with established betting platforms such as Polymarket with a differentiated mechanism for resolving bets. The decentralized exchange also expanded its outcome contracts into real-world events.
Today’s signal
The chart shows daily swings in the ratio between the prices in U.S. dollars of bitcoin and gold.
The ratio has been rising since March, indicating BTC outperformance relative to gold, and as of writing, it is holding onto the bullish trendline support. A bounce from here would imply the continuation of the rally.
Conversely, if the support breaks, it signals a resumption of the broader BTC bear market.
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Your day-ahead look for May 22, 2026
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