Crypto investment products post largest inflows since October, but face macro pressure

• Digital assets products saw $2.17 billion in net inflows last week, their largest since the October leverage flush.
• Bitcoin drove the flows with $1.55 billion, while the US led regionally, attracting $2.05 billion.
• Analyst says every Bitcoin's rise will likely be accompanied by profit-taking as geopolitical tensions weigh on the market.

Cryptocurrency investment products recorded $2.17 billion in net inflows last week, their largest positive flows since the October 10 leverage flush, according to CoinShares weekly report.

Bitcoin (BTC) led the move, drawing in $1.55 billion, while Ethereum (ETH) and Solana (SOL) saw inflows of $496 million and $45.5 million, respectively. Geographically, the US maintained its lead, attracting $2.05 billion, followed by Germany and Switzerland, which recorded $63.9 million and $41.6 million in inflows, respectively.

The move comes after a brief recovery across top cryptos last week, with Bitcoin and Ethereum approaching $100,000 and $3,500, respectively. However, sentiment turned negative on Friday as diplomatic tensions over the US' plan to acquire Greenland sparked $378 million in outflows.

Geopolitical tensions spark risk-off sentiments in crypto market

US President Donald Trump announced the US will impose an additional 10% tariff on goods from eight European countries opposing its acquisition of Greenland, including Denmark, Sweden, France, Norway, Germany, the UK, the Netherlands, and Finland, beginning February 1.

The European Union (EU) responded by planning fines of up to €93 billion ($101 billion) and other restrictions on US companies.

Following the EU's response, Bitcoin crashed below $93,000, triggering over $800 million in liquidations across the crypto market. The decline spiralled into US equities with the Nasdaq futures dropping 1.5%.

"The market is now pricing in the possibility that prolonged escalations could disrupt previous trade agreements, strain international relations, and further pressure risk assets," Farzam Ehsani, CEO of VALR crypto exchange, told FXStreet.

While Bitcoin may retest the $100,000 level, Ehsani noted that such a move will be accompanied by profit-taking amid macroeconomic risks that continue to weigh on the crypto market.

"Early signs of on-chain stabilization have not offset the macro headwinds facing digital assets," as investors remain cautious of geopolitical tensions due to Trump's unpredictable actions, he added.

Bitcoin is trading near $92,700, down 2.5% over the past 24 hours at the time of publication on Monday.