Crypto retreats as AI IPOs and war fears prompt $4B outflows

Crypto markets declined after investors pulled $4.21 billion from crypto investment products over three weeks, including $1.67 billion in the most recent week. Total assets under management in crypto exchange-traded products fell to $141 billion, the lowest level since early April. Major tokens, including Bitcoin, moved lower amid the redemptions.

Market participants cited a shift of institutional capital toward AI-related listings and large private-market offerings. Anthropic filed for an initial public offering on June 1 with an estimated valuation around $965 billion. Alphabet announced an $80 billion plan to finance AI infrastructure that includes $10 billion from Berkshire Hathaway. SpaceX began a Nasdaq roadshow this week targeting a $1.765 trillion valuation. NVIDIA’s share price has risen roughly 1,500% since the public debut of ChatGPT in late 2022, and AI-linked stocks account for about 45% of the S&P 500’s market value.

Geopolitical events also affected flows. U.S. strikes on Iranian air defense positions near the Strait of Hormuz in late May were followed by Iranian missile attacks that struck Kuwait and caused damage at Kuwait International Airport on June 3. Oil prices rose and U.S. Treasury yields increased after the incidents, and investors reduced exposure to risk assets, prompting further redemptions from crypto products.

Performance data show pressure on major tokens this year. Bitcoin is down about 21% year-to-date. Ethereum, Solana and XRP have fallen roughly 33%, 37% and 31% respectively. Spot Bitcoin exchange-traded funds continue to hold more than $94 billion in assets despite the outflows.

Bitwise Chief Investment Officer Matt Hougan wrote in a weekly memo that the Nasdaq‑100 is up about 43% year-over-year and that AI-related stocks have drawn institutional attention away from crypto. He added that investors now prioritize fundamentals over sentiment and described crypto as moving from a momentum trade to a contrarian bet.

Hougan noted that performance inside the crypto market is uneven. He highlighted tokens with specific narratives and use cases that have gained ground in recent weeks, citing examples including a token up about 72% in a month, another up 17% and others rising roughly 44% to 50%.

Separately, development work on stablecoin settlement is progressing with integration into Mastercard’s global settlement network and a payroll provider. Market participants estimate a roughly 50% to 55% chance of passage for pending federal clarity legislation. Those developments, along with spot Bitcoin ETFs, continue to provide institutional channels even as short-term flows move away from crypto.

Three-week outflows, higher Treasury yields and rising oil prices have coincided with the capital rotation toward AI-related equities and large private-market listings. Trading and asset totals reflect those simultaneous pressures on crypto markets.