Bitcoin ETFs Face Massive Outflow as Market Reacts to New Tariffs

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U.S.-based spot Bitcoin exchange-traded funds (ETFs) experienced a significant outflow on Tuesday, with a net loss of $326.27 million, marking the largest daily capital loss since March 11. This outflow coincided with investors beginning to assess the effects of President Trump’s new tariffs on China on the markets. The high tariffs announced by Trump took effect today, causing a sudden shift in risk appetite that sharply impacted both the cryptocurrency and traditional markets.

BlackRock’s Fund Leads the Outflow

The leading fund behind Tuesday’s outflows was BlackRock’s IBIT, which saw $252.9 million withdrawn. According to SoSoValue data, Bitwise’s BITB fund experienced an outflow of $21.7 million, while Ark and 21Shares’ joint product, ARKB, faced $19.9 million in outflows. Grayscale’s flagship GBTC and Mini Trust funds, as well as Franklin’s EZBC and Invesco’s BTCO, also felt the impact of this selling wave.

As a result of these outflows, spot Bitcoin ETFs have seen net withdrawals for four consecutive days. This downward trend, which began with a $109.2 million outflow on Monday, became more pronounced with Tuesday’s figures. On the same day, total trading volume dropped to $3 billion, significantly lower than Monday’s $6.6 billion and last Friday’s $4.4 billion levels.

According to Presto Research analyst Rick Maeda, the outflows in spot ETFs reflect investors’ sudden and cautious responses to macroeconomic developments. Maeda explained that news related to tariffs increases pressure on risky assets, prompting investors to abandon narratives and opt for widespread selling.

Flight from Risk Affects Global Markets

The flight from risk has not only impacted the cryptocurrency market but has also cast a shadow over traditional markets. U.S. stock indices closed lower on Tuesday, with the Dow Jones down 0.84%, S&P 500 down 1.57%, and Nasdaq losing 2.15%. These sharp declines in indices indicate that investors are positioning themselves against the potential impacts of tariff decisions.

Asian markets exhibited mixed trends as they entered Wednesday. Japan’s Nikkei 225 index fell by 3.9%, while the Shanghai Composite Index rose by 1.3%. South Korea’s Kospi index declined by 1.4%. Global investors are focused on the chain reactions triggered by the 104% import tariff that Trump announced against China.

Maeda emphasized that such shocks to the trading system are generally negative for risky assets in the short term. However, he also noted that markets tend to respond most sharply during periods of uncertainty, suggesting that the clarity brought about by the tariffs coming into effect could help investors find direction once again.

The largest cryptocurrency, Bitcoin, is trading at $77,465 with a 2.6% drop at the time of writing. Bitcoin, which had surpassed $80,000 earlier in the week, seems to have viewed that increase as a brief respite.

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