Crypto Investments Stall as Liquidations, Tariffs, and DeepSeek Shake Markets

• The crypto market cap has dropped from $3.52 trillion to $3.09 trillion since Feb. 1, 2025.
• Spot Bitcoin ETFs received $559.84 million in net inflows last week, while ETH funds shed $45.51 million in net outflows.
• DeepSeek resulted in Nvidia stock shedding $589 billion from its market cap on Jan. 27, 2025 – investors continue to pull out.

Cryptocurrency markets are experiencing a turbulent period as a multitude of global factors weigh down on investors, slowing inflows into digital assets considerably.

With Donald Trump now imposing trade tariffs on nations such as Canada, gigantic crypto market sell-offs, and elements in play, the market correction is beginning to look a little bearish.

Digital Asset Flows

According to the latest CoinShares report, weekly digital assets inflows have slowed considerably, pulling some $572 million for the week ending Jan. 31, 2025.

The report notes that volatile investor sentiment deepened following China’s DeepSeek AI rollout, which sent confusing shockwaves across Western markets and prompted a considerably large sell-off in tech markets.

Bitcoin (BTC) investment products represented most of last week’s inflows, bringing in some $486 million. Ethereum (ETH) wrapped the week with zero flows and has so far continued on a bearish trajectory.

Standing at $2,577, it has shed 17.51%  since Jan. 27 and 16.19% in the past 24 hours.

The report highlights that Ripple (XRP) is now the second-best-performing altcoin, with year-to-date (YTD) inflows now totaling $105 million following a $15 million net inflow last week.

Global Factors

Interestingly, the report notes that the U.S. saw weekly inflows of $474 million, raising its YTD total to $5 billion. However, Canada suffered outflows of $43 million, which may be attributed to Donald Trump’s tariff threats  and uncertainty around the nation’s political future.

In addition, a broader sell-off that saw hundreds of billions exit the crypto markets has raised concerns that the “Trump Trade” correction is finally here and that we may be entering bear market territory very soon.

Furthermore, the rollout of China’s AI, DeepSeek, rattled U.S. investors who promptly pulled out from major AI and tech firms.

Nvidia, the most valuable company in the world thanks to its powerful AI chips, shed $589 billion from its market cap on Jan. 27 following the release. Nvidia and other firms have struggled to rebound since.