Market-Wide Retreat Deepens Fear
The latest weekly report from Gate Ventures reveals a further decline in crypto market risk appetite, with major tokens falling across the board. Bitcoin (BTC) dropped 6.4% on the week, while Ethereum (ETH) fell more sharply by 7.9%. Total cryptocurrency market capitalization declined 5.4%, reflecting heavy selling pressure. The Fear & Greed Index, a widely followed sentiment gauge, has plunged into the 'Extreme Fear' zone, signaling a loss of investor confidence. This index has been declining over the past several weeks, moving from 'Fear' to its most pessimistic reading.
Record ETF Outflows Highlight Capital Flight
The most notable pressure point this week came from ETF flows. Spot BTC ETFs saw a net outflow of $1.79 billion in a single week, setting a new all-time record for weekly net outflows. Even more concerning, this marks the seventh consecutive week of net outflows, indicating that institutional and high-net-worth investors are actively reducing exposure amid short-term uncertainty. Spot ETH ETFs also experienced significant outflows, recording a net withdrawal of $273.3 million during the same period. The simultaneous outflows from both BTC and ETH ETFs suggest a systemic capital exodus from the crypto market, rather than token-specific event-driven selling.
In addition, Strategy's STRC has traded below its par value for six consecutive weeks. Market participants are closely monitoring any dividend rate adjustments or capital operation updates from the company, as the persistent discount reflects waning appetite for equity-linked crypto investment vehicles in the current climate.
Industry Developments: RWA Applications and Regulatory Reforms Advance
Despite the price downturn, innovation in underlying technology and applications continues. The real-world asset (RWA) tokenization space achieved a new milestone: Enso officially launched an RWA application that supports trading over 500 tokenized assets, significantly expanding the range and ecosystem coverage of tokenized asset trading. This move is expected to lower the barrier for traditional assets to move on-chain and further promote the integration of on-chain finance with the real economy.
On the regulatory front, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly opened a public comment period regarding the coordination of portfolio margin rules. This initiative aims to improve risk management and capital efficiency in the derivatives market, with particular implications for institutional investors holding both spot and futures positions in crypto. The feedback received during the comment period will influence the final policy direction.
Primary Market Remains Active; DeFi Leads Fundraising
While secondary market sentiment is gloomy, primary market fundraising activity remains resilient. Last week, the crypto sector recorded 18 funding rounds with total disclosed capital of $210.3 million. Among them, the DeFi segment raised $114 million, accounting for over 54% of the total and leading all verticals. This indicates that capital continues to flow into on-chain financial innovation and infrastructure projects, particularly decentralized exchanges, lending protocols, and cross-chain interoperability solutions. Even amid a market downturn, investors retain confidence in the medium- to long-term growth potential of DeFi.