Geopolitics, AI drive $5.8B outflows from crypto ETFs

CoinShares Research reported $5.8 billion of outflows from digital-asset exchange-traded funds over the past three-plus weeks in a research note dated June 5, 2026. The firm described the run of withdrawals as one of the sharpest sustained outflows in more than a year and noted that the asset class remains roughly flat year to date.

The note attributed the shift in flows to two primary factors: geopolitical uncertainty tied to the Iran conflict and a large rotation of capital into artificial-intelligence-related investments. CoinShares described the change as a repricing of risk appetite rather than a structural break.

On geopolitics, CoinShares wrote that the Iran situation has proven more persistent than markets expected and has fed directly into shifts in the interest-rate curve. The firm noted that two months ago markets priced one to two rate cuts for 2026; the curve now implies roughly 40 basis points of hikes. The research note included the assessment that the repricing “is doing the most damage,” while adding that hard macro data has largely held up and payrolls have not yet shown broad deterioration.

On the AI rotation, CoinShares reported that investors are directing capital into AI-focused software and services, drawing liquidity away from digital assets and other thematic areas. The firm warned of a gap between current capital expenditure on AI and the revenue that will be required to justify present valuations, and it said the lag between capex and revenue — and a possible revenue trough — will be the mechanism to watch over the next couple of years.

Sales by a former MicroStrategy executive have affected sentiment, CoinShares noted, but the firm characterized those transactions as symbolic rather than systemic. The holdings involved represent roughly 1% of total Bitcoin supply. CoinShares added that the sales were consistent with dividend obligations and followed a prior sale in December 2022 for tax reasons, and that the transactions do not materially change Bitcoin’s supply-demand picture.

On price outlook, the research note said new cycle lows near the $60,000 area would be surprising. CoinShares observed that the current outflow cycle is on track to be the largest in over a year and that a decisive breakout in Bitcoin prices is unlikely until the Iran conflict de-escalates and the rate outlook becomes more favorable. The firm maintained that the case for digital assets beyond a one-year horizon remains intact.

Looking beyond flows, CoinShares highlighted tokenization and stablecoins as an emerging structural theme. The report said stablecoin supply rose from about $300 billion to $360 billion in the past six months. The firm referenced an investor projection of a potential $2 trillion stablecoin market by 2028 as a scenario that could prompt broader bank and institutional adoption if legislative changes such as the CLARITY Act are enacted around early July.

CoinShares noted upcoming policy events that may add to near-term uncertainty: the European Central Bank meets next Thursday and the Federal Reserve meets the following week in its first session under chair Kevin Warsh. The note said Warsh has signaled less forward guidance than his predecessor and that the firm will publish further commentary after the Fed decision. CoinShares also referenced its Crypto ETF Hub for additional analysis.