Key Takeaways:
- Single-day ETF inflows amid broader outflows show investors haven’t completely abandoned Bitcoin funds.
- Tariff announcements causing a $3T wipeout reveal policies heavily impact crypto markets.
- Synchronized global market downturn weakens Bitcoin’s value as a portfolio diversification tool.
The 12 Spot Bitcoin ETFs in the U.S. recently experienced $172.89 million in net outflows, breaking a two-week streak of inflows that had seen nearly $941 million invested in the funds.
This shift in investor behavior marks a notable reversal, with the majority of the outflows coming from Grayscale’s GBTC, which alone lost $95.5 million over the past week.Do Bitcoin ETFs Face Uneven Redemptions?
On April 7, from SoSoValue showed that the ETF outflows were recorded between March 31 and April 4.
The trend kicked off on March 31 with $71.07 million exiting the funds. It worsened a day after as redemptions increased to $157.64 million.
The sell-off continued into April 3 and April 4. About $99.86 million and $64.88 million exited the market on these days. However, recovery came on April 2, with $220.76 million of new capital flowing in.
Grayscale’s GBTC suffered the most from the outflows, shedding $95.5 million over the week.
Other major players weren’t spared.
WisdomTree’s BTCW lost $44.6 million, while iShares Bitcoin Trust ETF (IBIT) and Bitwise Bitcoin ETF (BITB) saw redemptions of $35.5 million and $24.1 million, respectively.
Ark 21Shares Bitcoin ETF (ARKB) and HODL funds followed with outflows of $22.2 million and $4.9 million.
Still, not all Bitcoin ETFs were in the red. Three funds – Grayscale’s Spot Bitcoin Trust, Franklin Templeton’s EZBC, and Fidelity’s FBTC managed to buck the trend.
Together, they attracted $61.8 million in inflows, signaling some pockets of investor confidence.
Ethereum ETFs were not spared. They posted , which extended their losing streak to six consecutive weeks.
Over that period, investors have pulled over $795 million from Ethereum ETFs, reflecting a broader climate of caution across both major crypto assets.Bearish Trend Wipes Trillions from Crypto & Stock Markets
Beyond the ETF outflows, the broader cryptocurrency market was equally affected.
Bitcoin prices plummeted to nearly $75,000, which contributed to a widespread cascade of forced liquidations, with total market liquidations exceeding $1.36 billion in just 24 hours.
The brunt of the losses was borne by long-positioned futures traders, with Bitcoin longs alone accounting for .
Ethereum traders faced a similar fate, with nearly $328 million wiped out of the market.
Other altcoins, including Solana (SOL) and XRP, also contributed majorly to the liquidations, with each seeing approximately $60 million in losses.
As the market saw widespread panic, ETH fell 20% to $1,449, while major altcoins like SOL, XRP, and Dogecoin all experienced steep declines of up to 20%.
Furthermore, on April 6, U.S. stock futures took a nosedive, amplifying fears of a wider market crash.
📉 Following Trump’s tariff announcements yesterday, the S&P 500 is currently down -4.02% in Thursday trading. In the 2020’s, there have only been 5 worse performing days:🗓️ March 16, 2020: -11.98%🗓️ March 12, 2020: -9.51%🗓️ March 9, 2020: -7.60%🗓️ June 11, 2020: -5.89%… — Santiment (@santimentfeed)
The S&P 500 futures fell 5.98%, the Nasdaq 100 futures dropped 6.2%, and the Dow futures plummeted 5.5%.
Major tech stocks also recorded heavy losses, with , while Nvidia and Apple saw drops of 7.36% and 7.29%, respectively.
Since February 19, the U.S. stock market alone has lost a staggering $11 trillion in value.
Notably, April 4 saw the steepest single-day decline, with $3.25 trillion wiped out, surpassing the total value of the entire cryptocurrency market.U.S. Government Tariffs War Fuels Projection of Recession
The sudden crash in the crypto and stock markets is linked to President Trump’s new policies.
On April 2, President Trump declared “Liberation Day” and introduced sweeping tariff measures, including a baseline 10% tariff on all U.S. imports, with higher duties imposed on several key trading partners.
Tariffs can be used as a tool to protect American industries.But tariffs on their own do not magically create more American jobs or lead to more U.S. production.Trump’s careless “Liberation Day” tariffs will result in a massive transfer of wealth to the very top. — Robert Reich (@RBReich)
The announcement immediately shook traditional and digital asset markets, spurring fears of a trade war and economic recession.
China quickly responded with its own set of levies on American imports, which escalated tensions between the world’s two largest economies.
There have also been projections about a looming recession. Goldman Sachs recently increased the likelihood of a U.S. recession within the next year from 35% to 45%.Frequently Asked Questions (FAQs)Could regulatory changes impact future inflows into Ethereum and Bitcoin ETFs?
Yes, future rulings by the U.S. Securities and Exchange Commission (SEC) or shifts in crypto policy could open the doors to institutional capital. However, uncertain or restrictive policies could trigger widespread redemptions from Bitcoin ETFs. How might interest rate changes from the Federal Reserve impact Bitcoin ETF flows?
Investors usually move their capital away from high-risk assets like Bitcoin ETFs when interest rates rise. They prefer safer investments, such as treasury bonds or money market funds, which offer more predictable returns with a reduced risk profile.
