Europe capitalizes on price decline as US investments continue to decrease – who is currently purchasing Bitcoin?

Five consecutive weeks of net redemptions from cryptocurrency investment products are sufficient to raise concerns, indicating a recurring decision made with the same rationale, on the same schedule, by similar committees.

CoinShares’ report dated Feb. 23 revealed that digital asset investment products experienced $288 million in outflows for the week, marking the fifth straight weekly decline, which totals $4 billion over the five-week period.

Trading activity also slowed, with weekly volumes around $17 billion, described by CoinShares as the lowest since last July.

The data indicates that the US experienced $347 million in outflows, while Europe and Canada collectively recorded $59 million in inflows.

With consistent pricing, identical charts, and the same global market, different participants have been engaging in varied activities through the most regulated and easily measurable channels. The variation in regional demand for Bitcoin prompts inquiries about who remains willing to invest while the US is reducing its exposure, and what this implies about the distribution of risk appetite across borders.

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However, last week the market experienced some relief as net inflows turned positive, breaking the streak and bringing in approximately $787 million. Although this was insufficient to reverse the year-to-date net outflow, it provided a much-needed respite from the trend.

A map that matters because it repeats

When we consider the five-week trend as a pattern first, we can set aside the week-to-week fluctuations for later analysis.

A single week of outflows may not signify anything significant, as it could stem from routine adjustments: tax timing, profit-taking, or even a rebalancing that may be reversed.

However, five consecutive weeks of outflows, coupled with declining volumes, is enough to warrant caution. It indicates a market where fewer participants are inclined to trade, while more are looking to decrease exposure and maintain cash flexibility.

Examining the regional breakdown reveals that US outflows surpass the combined inflows from Europe and Canada, indicating that this is not a straightforward transfer of buying from non-US investors to absorb US selling within regulated products.

Nonetheless, a positive figure outside the US during a low-volume week is not insignificant. It highlights where marginal buying is still occurring, presented in a manner that is easily understandable for institutions: regulated structures, documented flows, and publishable attribution.

The straightforward interpretation of this data is quite limited. It shows that the largest capital market in the world is reducing its crypto exposure through products designed for quick, compliant positioning. Simultaneously, a smaller set of markets continues to purchase through similar vehicles.

This divergence can persist for reasons largely unrelated to price or network specifics, but heavily influenced by local politics, headlines, and career risks.

Why the US is behaving differently right now

Policy has become a daily variable in the US market, and the cost of uncertainty is reflected in public pricing.

A Supreme Court ruling invalidated key components of President Donald Trump’s tariff program, raising questions about applicable tariff rates, the authority behind them, and their durability. With tariff rates “up in the air,” as some reports suggest, an economic fog has descended on the US, leaving businesses and investors uncertain about the rules.

This fog has specific market implications. It complicates predictions for the next move, which could arise from a court ruling, an agency announcement, or a political statement. It also makes defending the same risk position internally more challenging, as the rationale for maintaining it can quickly be overshadowed by new interpretations of the rules. In such an environment, portfolios tend to tighten, starting with exposures that are easy to reduce, and crypto wrappers often fall into that category.

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The tariff situation also introduces significant figures. Over $175 billion in tariff collections could be subject to refunds following the Supreme Court ruling, according to estimates from the Penn-Wharton Budget Model. The Financial Times reported a surge of lawsuits seeking tariff refunds, estimating the total at over $160 billion, illustrating how swiftly the ruling translated into actual claims.

When these elements are combined, the outflows observed in the US become clearer. The market has become increasingly reactive to regulatory uncertainty, and in such an environment, managers create liquidity by taking actions that are quick, straightforward, and easily justifiable, such as reducing crypto exposure through regulated products.

Why Europe and Canada can keep buying the same dip

Europe is not isolated from US trade policy. It faces its share of impacts through exports, currency fluctuations, and corporate strategies. However, investors acquiring crypto exposure through European ETPs often exhibit different behaviors compared to those purchasing through US-listed products, particularly during weeks when the US political news cycle is intense.

Part of this difference lies in the composition of the buyer base.

European crypto ETP flows tend to be more allocator-driven and less trading-driven, especially in markets where exchange-traded products are a common method for expressing global perspectives. Thus, for European crypto ETF investors, the recent drawdown has not triggered a widespread rush to exit, even as prices have declined.

Table showing the crypto ETP flows by country (Source: CoinShares)

This does not imply that European investors are without caution. They are likely adopting a long-term strategy, where buying during downturns is part of their approach.

Another factor is the informational distance. The legal dispute over US tariff authority has global implications but is primarily a domestic issue. The debate occurs within US institutions and politics, which can amplify its perceived significance to US allocators. Outside the US, the same situation may be viewed as just one of many risk factors rather than a daily scoreboard.

European policymakers are also addressing the spillover effects directly. ECB President Christine Lagarde noted that trade is challenging for the eurozone in a world influenced by unpredictable US policy. This is significant as it reframes Europe’s position and indicates that it is not ignoring the volatility. Both regulators and investors are interpreting it as a cross-border constraint, while the US experiences it as a domestic conflict that continues to resurface.

Canada’s role in the inflows further emphasizes this point. CoinShares categorized Europe and Canada as net buyers, while the US recorded the majority of the outflows. Although Canada does not share the same institutions as Europe, it has a similarly low direct exposure to the daily political tensions surrounding the tariff dispute.

In this context, the buying activity observed from both regions indicates that this market is supported by non-US allocators, not solely Europeans.

What the divergence can do to price action

CoinShares’ data indicates that US outflows exceeded the combined inflows from Europe and Canada for the same week.

This suggests that the non-US demand for ETPs is insufficient to offset the selling in the US.

Nevertheless, marginal flows can still be significant when volumes are low, as the market requires less incremental selling to drive prices down and more incremental buying to push prices up. During quieter weeks, the identity of the marginal buyer becomes more critical than in weeks of high activity.

A US-led retreat in regulated products can also influence how price rallies develop. When US wrappers provide a steady bid, price increases can appear smoother due to systematic allocation and routine inflows. When that bid weakens, rallies depend more on spot demand outside ETPs, derivatives, and discretionary buying that may occur unevenly. This does not render rallies impossible, but it complicates their achievement.

Simultaneously, a consistent non-US demand can mitigate the severity of a selloff. It cannot reverse a global risk-off trend on its own, nor can it guarantee stability. However, it can slow the pace at which selling cascades through a single channel, especially when overall trading participation is lower.

The key point is not that European ETP inflows “set the price,” as they remain too small to significantly influence it alone. Rather, they can maintain a bid even when the US is pulling back.

A short watchlist

This situation revolves around allocation, so understanding it should be based on allocation data.

First, monitor the next US weekly report. If inflows persist or the size of outflows decreases, the pattern may be easing. If it continues, risk aversion remains elevated.

Second, observe whether Europe and Canada continue to report positive weeks. A single week may not provide much insight, but several consecutive weeks can be a strong indicator of market behavior.

Third, keep an eye on trading volumes. The $17 billion figure was the lowest since July 2025. If volumes recover, it indicates a return of participation. However, if they remain low, it suggests that the market is still positioned defensively.

Chart showing the weekly crypto asset flows from May 2025 to February 2026 (Source: CoinShares)

Fourth, pay attention to tariff clarity. The US is currently in a regulatory environment that markets find challenging to price. If a durable framework emerges, the situation may stabilize. However, if it remains unresolved, it will continue to fuel the uncertainty that has led to these outflows initially.

The marginal buyer is still here, and the map is shifting

Crypto markets often discuss universal narratives, and Bitcoin’s global nature encourages this. However, capital remains tied to countries, institutions, politics, and news cycles that influence what is perceived as safe to hold and what is easier to sell.

A five-week streak of outflows concentrated in the US indicates that American allocators are seeking more liquidity and reducing exposures that trade as high beta. The tariff ruling and the uncertainty surrounding applicable rates help clarify why the US market appears more challenging to price at present, with refund calculations and legal authority causing fluctuations in market conditions.

In this context, the net inflows from Europe and Canada may seem like a sign of confidence. However, the reality is much less dramatic. These inflows demonstrate that there are still allocations occurring through regulated channels, even as the US reduces its exposure.

This is significant for price formation, as it indicates that the market is not solely dependent on one country’s appetite. The buyer remains active, but the geographical focus is shifting.

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