The crypto market, known for its volatility, has recently been in tumult, resulting in zero net flows in Ethereum investment products for the first time since the approval of new U.S.-based ETFs last year. This marks an unprecedented event for the second-largest crypto, which has been affected by recent factors such as trade war fears and tariff announcements.
Ethereum’s value has taken a significant hit, dipping to as low as $2,368 at one point on Monday morning Eastern Time. As of now, the crypto’s price stands at $2,740 according to CoinGecko. James Butterfill, CoinShares Head of Research, expressed his surprise at the net zero flows in Ethereum investments, adding that the sentiment surrounding Ethereum appears to be in a slump.
The CoinShares report, which covers crypto funds at a global level, remarked: “Ethereum ended the week with a net zero flows but suffered earlier in the week, likely due to its greater exposure to the technology sector and the global growth outlook.”
The crypto market experienced further upheaval last week after Chinese artificial intelligence startup DeepSeek revealed an open-source large language model that significantly undercut the cost of training compared to leading U.S. models. This impressive development led tech investors to quickly divest from American AI-related firms, dragging down crypto prices in the process.
Both Bitcoin and Ethereum felt the impact, although Bitcoin managed to recover, with investors injecting a total of $486 million into funds providing exposure to the leading crypto.
CoinShares’ report noted: “Despite this initial sell-off, the market rebounded with over $1 billion in inflows later in the week.” This represented a shift in trend from the previous week when crypto investment funds saw nearly $2 billion in inflow following President Trump’s inauguration.
However, this momentum was halted following an AI-related sell-off, and crypto prices have been under downward pressure ever since. President Trump’s announcement of tariffs against Canada, China, and Mexico added to the turmoil. Although a subsequent cordial conversation between President Trump and Mexican President Claudia Sheinbaum resulted in a delay in the imposition of these tariffs, Ethereum continues to struggle.
Meanwhile, Bitcoin has managed to rally, posting a 4% gain to $101,843. CoinShares also highlighted that among all altcoins with ETFs worldwide, XRP is the second most popular this year, with year-to-date inflows standing at $105 million.
The crypto market remains a complex and volatile space, with various geopolitical and technological factors influencing its trajectory. As the landscape continues to evolve, investors and enthusiasts alike will be keenly watching for signs of stability or further tumult.
Edited by Andrew Hayward.
