US Government Shutdown Drives Record $6 Billion Crypto Inflows

After last week’s macro-driven outflows, investors returned in force amid Fed easing and political uncertainty, pushing crypto inflows toward the $6 billion mark.

The US government shutdown, among other macro concerns, drew investor interest back to risk-on assets amid fiat uncertainty.

Crypto Inflows Reached $5.9 Billion Last Week

According to the latest CoinShares report, digital asset investment products saw a dramatic turnaround last week, recording record inflows of $5.95 billion.

The surge follows a sharp $812 million outflow the previous week, reflecting how swiftly sentiment has shifted.

According to James Butterfill, head of research at CoinShares, it came as investors responded to weak US employment data, a recent Fed rate cut, and mounting concerns over US government stability after the shutdown.

The rebound marks the largest weekly inflow on record for digital assets, pushing total assets under management (AuM) to an all-time high of $254 billion.

Butterfill described the movement as a delayed response to the FOMC’s dovish pivot, amplified by softer economic indicators and a loss of confidence in US fiscal governance.

“Investors appear to be rotating back into digital assets as a hedge against policy uncertainty,” the report noted.

Bitcoin and Ethereum Lead the Charge As Sentiment Shifts From Panic to Positioning

Just one week earlier, digital asset products experienced their sharpest pullback in months, $812 million in outflows, led by $719 million from Bitcoin and $409 million from Ethereum, after stronger-than-expected macro data temporarily revived fears of a more hawkish Federal Reserve.

At the time, US-based investors drove over $1 billion in withdrawals, signaling widespread caution. That caution has now flipped decisively to optimism. The US led last week’s inflows with a record $5.0 billion, while Switzerland ($563 million) and Germany ($312 million) also posted historic highs.

Crypto Inflows by Asset Metrics. Source: CoinShares Report

The CoinShares executive attributes the rebound to fading inflation fears, dovish rate expectations, and a political risk premium tied to the government shutdown. Together, these have reignited demand for alternative, non-sovereign assets like Bitcoin.

Bitcoin attracted $3.55 billion in inflows, its largest on record, as prices approached all-time highs. Despite these gains, investors notably avoided short-Bitcoin products, suggesting strong conviction that the rally could extend.

Ethereum also enjoyed a stellar week, pulling in $1.48 billion, bringing its year-to-date (YTD) inflows to $13.7 billion, nearly triple its 2024 total.

Solana continued to assert its position as a key institutional favorite, drawing $706.5 million, another all-time weekly record that brought its YTD total to $2.58 billion.

XRP followed with $219.4 million, reflecting renewed appetite for select large-cap altcoins even as smaller tokens saw little interest.

Crypto Inflows by Asset Metrics. Source: CoinShares Report

The swing from a billion-dollar outflow to a near $6 billion inflow in the space of two weeks highlights the crypto market’s heightened sensitivity to macroeconomic and political cues.

With the US government shutdown casting doubts over fiscal management and the Fed signaling a more accommodative stance, digital assets appear to be reasserting their role as risk-on bets and macro hedges.

CoinShares suggests institutional capital could remain sticky if the current momentum persists, especially as investors seek yield and diversification amid volatile traditional markets.