Market News

US Crypto Investors Grapple with $952 Million Withdrawals Amid Regulatory Delays

U.S. crypto funds have experienced significant withdrawals, totaling $952 million, primarily due to delays surrounding the long-anticipated CLARITY Act.

This shift marks the first weekly outflow in nearly a month, with most of the withdrawals concentrated in the U.S. market.

Data from CoinShares indicates that outflows primarily affected Ethereum and Bitcoin investment products, igniting concerns over regulatory clarity.

The proposed legislation aims to define the treatment of digital assets under securities and commodities laws, but progress has stalled amid political turmoil.

In addition to regulatory uncertainties, bipartisan lawmakers are pushing for reforms to the taxing of crypto staking rewards to encourage broader adoption.

Currently, staking rewards are taxed upon receipt, complicating participation and potentially pushing innovation overseas.

While Bitcoin hovers around $90,000, alternative cryptocurrencies like Solana and XRP have shown resilience with continued inflows.

Investors are closely monitoring how upcoming votes, such as that concerning Uniswap governance, could further shape the regulatory landscape.

As 2025 approaches, the crypto community remains on edge about how pending legislation and tax reforms will influence their investment strategies.

With total assets under management in crypto products declining, the urgency for regulatory clarity has never been more pronounced.