Dogecoin spot exchange-traded funds (ETFs) recorded a net outflow of $538,000 last week. It was the largest weekly outflow since mid-August.

U.Today, a blockchain media outlet, reported on Oct. 24 that Dogecoin spot ETFs failed to generate a clear inflow of funds amid a broader decline in the cryptocurrency market. There have been almost no weekly net inflows in recent months, and investor participation has slowed.

Market sentiment is also not supportive. Dogecoin traded around $0.07553 as of Oct. 24 and fell 5.62 percent over the past 24 hours. With the ETF ending a weak week and Dogecoin declining at the same time, investor sentiment appears to have weakened further.

As inflows into Dogecoin spot ETFs fail to continue, institutional investors are choosing to wait and see to avoid potential losses in a high-volatility phase. With weekly net inflows remaining scarce, Dogecoin spot ETFs are staying apart from the broader market recovery trend.

Still, a decline in an ETF's net assets needs to be distinguished from fund outflows. When the price of Dogecoin falls, the value of the assets held by the fund can decline even if money does not leave. When a price decline and net outflows occur at the same time, both factors are reflected in net assets, so the scale of fund withdrawals needs to be reviewed separately.

Rising trading volume does not necessarily mean new inflows of funds. Because ETFs are traded between investors on stock markets, fund inflows can remain stagnant even if trading becomes more active. To gauge whether demand is recovering, it is necessary to check not only trading volume but also net inflows and changes in the fund's holdings.

It remains to be seen whether this outflow reflects temporary risk aversion or a sustained drop in investment demand. A key question for judging a recovery in investor sentiment is whether the size of net outflows merely shrinks or whether new money flows in steadily.