Amidst concerns over interest rates and geopolitical instability, crypto investors pulled back for the second consecutive week, withdrawing hundreds of millions from digital asset products.

According to CoinShares, digital asset investment products experienced net outflows of $206 million last week, primarily from U.S. ETFs and financial vehicles linked to Bitcoin (BTC).

While global ETP trading volumes decreased from $21 billion to $18 billion, BTC trading activity continued to rise. However, ETFs accounted for only around 28% of all Bitcoin trading, down from 55% a month ago, due to macroeconomic factors.

CoinShares' report suggests that waning appetite from ETP/ETF investors may be driven by expectations of the Federal Reserve keeping interest rates high for an extended period.

In the U.S., ETFs saw $244 million in outflows, with BTC experiencing over $192 million in withdrawals, partly due to Grayscale GBTC liquidations. Despite this, bearish investors did not significantly increase short positions or products, with short-Bitcoin funds witnessing only around $300,000 in outflows.

Ether (ETH) continued its six-week outflow streak, shedding another $34 million. Meanwhile, blockchain equities saw $9 million in outflows, marking the 11th consecutive week of reduced investor confidence in crypto-related stocks.

CoinShares analysts highlighted concerns among investors about the impact of Bitcoin halving on BTC mining entities, contributing to the overall cautious sentiment in the market.