Digital asset investment products faced substantial outflows, marking the second-largest withdrawal of 2026, with investors pulling $1.67 billion last week, as reported by Decryptnews. Here’s what you need to know:

— Crypto investment products experienced outflows totaling $1.67 billion last week, making it the second-largest weekly withdrawal of 2026, which brings the total redemptions over the last three weeks to $4.21 billion.

— This pullback, largely influenced by U.S. investors amid escalating geopolitical tensions involving Iran and Israel, reduced assets under management to approximately $141 billion, the lowest level observed since early April.

— Bitcoin funds were hit the hardest, with a record outflow of $1.44 billion for the week and a significant decline in year-to-date inflows. Ethereum products also suffered heavy redemptions, while only a select few altcoins, particularly XRP, managed to attract new investments.

By the end of May, crypto investment products recorded their second-largest weekly outflow of 2026, with a total of $1.67 billion withdrawn from digital asset funds as geopolitical tensions and a broader risk-averse sentiment impacted the markets, according to Decryptnews.

The withdrawals represented the third consecutive week of net outflows, with total redemptions over the last three weeks amounting to $4.21 billion. Decryptnews highlighted that concerns regarding Iran overshadowed any positive sentiment from recent advancements on the CLARITY Act, a U.S. bill concerning crypto market structure.

Total assets under management across digital asset investment products decreased from $148 billion to $141 billion in one week, marking the lowest level since early April.

These outflows correspond with a sharp drop in cryptocurrency prices. Bitcoin approached the $70,000 threshold on Monday following reports that Iran suspended discussions with the United States in response to Israel’s ongoing actions in Lebanon. This event coincided with Strategy (MSTR), the largest bitcoin holder, selling part of its holdings, despite its executive chairman Michal Saylor previously stating he would not do so. Over the past 24 hours, the largest cryptocurrency has seen a decline of approximately 3%, further impacting digital asset investment products.

The United States was responsible for nearly all of last week’s outflows, withdrawing $1.63 billion from crypto funds. Germany, which had largely escaped previous selling episodes, reported outflows of $25.7 million. Sweden and Hong Kong recorded withdrawals of $6.6 million and $4.5 million, respectively.

Bitcoin and Ethereum (ETH) funds also faced pressure, with $257.3 million in outflows noted for Ethereum. Meanwhile, interest in alternative cryptocurrencies significantly weakened. Decryptnews observed that only five digital assets attracted inflows exceeding $1 million, a decrease from 11 assets three weeks ago. XRP (XRP) led the way with $20.3 million in inflows, followed by Hyperliquid (HYPE) at $10.8 million and Near at $7.6 million.

Despite the recent downturn, crypto investment products still maintain around $142 billion in global assets, highlighting the substantial institutional capital invested in the sector, even as market sentiment declines.