Three consecutive weeks of heavy outflows have rattled digital asset markets, but the fundamental picture has not changed. US$5.8B has left digital asset ETFs over the past three-plus weeks,¹ one of the sharpest sustained outflow runs in more than a year. Despite that, the asset class is still roughly flat year to date. This is a repricing of risk appetite, not a structural break.
Two forces are driving it. First, geopolitics. The Iran conflict is proving more intractable than markets anticipated, and the resulting uncertainty has fed directly into rate expectations. Just two months ago, markets were pricing one to two cuts for 2026, a backdrop that would have supported Bitcoin. The curve has now swung to implying roughly 40bps of hikes,¹ and that repricing is doing the most damage. Hard macro data has held up; payrolls could disappoint, but nothing in the prints yet suggests a broader deterioration.
Second, AI. Capital is rotating hard into AI exposure, drawing liquidity out of digital assets and other themes alike. US software and services equities are suffering from the same dynamic: markets are questioning how much of enterprise IT spend AI will ultimately displace. It is worth using the word bubble more freely here, with one caveat: the inefficiency will not be visible for a couple of years. The mechanism to watch is the revenue trough. An enormous wave of capex is being deployed now, with a gap between that spend and the revenues needed to justify current multiples.
Strategy (ex-MicroStrategy): symbolic, not systemic
Strategy’s recent sales have weighed on sentiment, but the systemic read is overblown. His holdings represent roughly 1% of all Bitcoin in existence.¹ The sale is consistent with dividend obligations and marks the second time he has sold, having done so in December 2022 for tax purposes. It does not change the supply-demand picture.
Bitcoin: beaten up, not broken
New cycle lows from around the US$60k level would be surprising.¹ The current outflow cycle is on track to be the largest in over a year, sentiment is bruised, and a breakout is not on the table until Iran de-escalates and the rate outlook turns. None of this alters the one-year-and-beyond case. When Bitcoin was at US$80k, CoinShares was already cautious that it would struggle to break decisively higher given these overhangs. That caution has been borne out.
What comes next: tokenization
While AI dominates capital allocation today, tokenization is building quietly as the next structural theme. Stablecoin supply has expanded from US$300B to US$360B in six months.¹ Scott Bessent has publicly put a US$2T stablecoin market by 2028 on the table,¹ and if the CLARITY Act is signed into law around 4 July as hoped, bank and institutional adoption should accelerate.
The ECB meets next Thursday; the Fed the week after, in its first meeting under Kevin Warsh. Warsh has signalled less forward guidance than Powell, which adds uncertainty to rate communications. CoinShares Research will publish a comment on the Fed decision and its implications for digital assets.
For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.
Sources
¹ CoinShares Research, 05 Jun 2026
