The U.S. accounted for the vast majority of redemptions, with $1.65 billion in outflows. Canada and Sweden also posted withdrawals of $37.3 million and $18.9 million, respectively. Switzerland and Germany registered modest inflows of $11.0 million and $4.3 million.
“We believe this reflects a combination of factors, including the appointment of a more hawkish U.S. Federal Reserve Chair, continued whale selling associated with the four-year cycle, and heightened geopolitical volatility,” said James Butterfill, head of research at CoinShares, in the report.
“Since the price highs in October 2025, we have seen total assets under management fall by $73 billion.”
Change at the FedWarsh’s views on cryptocurrency have been mixed. In a 2022 opinion essay, he described many private crypto projects as “fraudulent” and argued that cryptocurrency was “software, not money.” More recently, he has struck a more conciliatory tone, saying in a 2025 interview that Bitcoin “does not make me nervous” and can serve as a check on policymakers.
Thomas Perfumo, global economist at Kraken, said markets may be overstating how hawkish a Warsh-led Fed would be. “While some characterize Warsh as a hawk, his underlying policy bias on interest rates remains dovish,” Perfumo told Decrypt, pointing to CME Fed Funds Futures showing little change in expectations for rate cuts later in 2026.
“Where markets may be disappointed is in Warsh’s more skeptical posture on balance sheet expansion through measures such as quantitative easing,” he added. “The nomination largely reinforces the status quo: the Fed is likely to continue to cut rates this year, but broader market liquidity is expected to stabilize rather than meaningfully expand.”
