Crypto Fund Flows Are Starting to Fracture and Investors Exit Bitcoin and ether (ETH) exchange-traded funds (ETFs) while rotating towards alternative tokens such as Hyperliquid’s hype (HYPE) and XRP (XRP).
Bitcoin ETFs recorded more than $1 billion in capital outflows last week, extending a sharp institutional pullback, while ether funds lost another $215 million, according to data source SoSoValue. The continued bleeding of the two largest assets indicates a cooling appetite for broad, benchmark exposure to cryptocurrencies.
But the rescues have not been uniform.
Spot products investing in the Hyperliquid hype token, issued by Bitwise and 21Shares, attracted a combined total of $72.38 million, underscoring that capital is being accurately redeployed rather than exiting the market entirely. The XRP and sol ETFs recorded inflows worth $22 million and $15.6 million, respectively.
“The broader message: Capital has not uniformly abandoned cryptocurrencies. It is pivoting toward newer narratives and away from large-cap exposure,” said Timothy Misir, head of research at BRN, in an email.
The hype is real
The strong acceptance of the advertising ETFs, which went live a week ago, coincides with a strong rally in the token price and strong network activity.
The token has been on the rise, jumping from $38 to $63 in the last 10 days, CoinDesk data shows. It has gained 59% for the month, a staggering performance compared to market leader bitcoin’s 1% gain.
Decentralized platform Hyperliquid has generated $13.2 million in fees over the past seven days, the fifth-largest figure, behind stablecoin giants like Tether and Circle Internet (CRCL), as well as launchpad Pump. Canton Network is in fourth place, although, according to DeFiLlama, this is largely due to substantial incentives.
Hyperliquid’s revenue is expected to continue growing thanks to its recent agreement with Coinbase and Circle to integrate the USDC stablecoin as a listed asset.
Some analysts say Hyperliquid is quickly becoming a challenger to traditional trading platforms and prediction markets. And for good reason: Since the Iran war began in late February, the platform’s HIP-3 market has consistently handled millions in trading volume in perpetual futures linked to traditional and real-world assets (RWAs), such as oil, gold, and US stock indices.
“Hyperliquid fundamental metrics continue to strengthen across the board as HIP-3 markets hit new weekly highs with 2.6 billion in open interest across all RWA markets. HIP-4 launched earnings markets a couple of weeks ago with more modest growth,” data tracking website Artemis said in the weekly newsletter.
“Perpetual stocks, pre-IPO markets, and prediction markets are in the early stages, and Hyperliquid is well positioned to capitalize on that momentum,” Artemis said.
