Bitcoin ETFs underwent nearly $100 million in outflows following Trump’s announcement of new tariffs, causing panic in the markets.
The Grayscale Bitcoin Trust suffered the greatest losses, while only BlackRock’s IBIT ETF attracted $65.25 million in net inflows, a sign of trust in large asset managers.
This massive withdrawal reflects a general aversion to risk and confirms the strong correlation between crypto and traditional markets, despite Bitcoin’s search for safe haven status.
Black Thursday for Wall Street and Bitcoin ETFs
US markets experienced their worst trading day since the 2020 pandemic on Thursday. The Nasdaq plunged 6%, the S&P 500 fell 4.8%, and the Dow Jones lost 3.9%. The cause of this seismic event was an unexpected (or expected) announcement by Donald Trump. The US President unveiled a new wave of tariffs, with a basic 10% tax on imports and potential increases of up to 50% for certain countries. This abrupt return to protectionism panicked investors.
Immediate repercussions on Bitcoin ETFs
The tension spread to the cryptocurrency market, where BTC lost over 6% throughout the day. As a result, Bitcoin Spot ETFs experienced significant outflows. Nearly $100 million vanished from exchange-traded funds, reversing the previous day’s trend of net inflows totaling $220.76 million.
The Grayscale Bitcoin Trust (GBTC) led the sell-off with $60.2 million in outflows. Bitwise (BITB) and Fidelity (FBTC) followed with $44.19 million and $23.27 million in withdrawals, respectively. Other issuers, such as Ark/21Shares (ARKB), VanEck (HODL), and WisdomTree (BTCW), were also affected.
Despite these movements, Bitcoin appears to be recovering, reaching $84,500 on Friday morning.
BlackRock stands strong amidst the storm
In a stark contrast, BlackRock’s IBIT ETF, the largest in terms of net assets, recorded a $65.25 million net inflow. This positive flow, against the market’s tide, demonstrates investors’ confidence in passive management and the perceived stability of the issuer. In a climate of extreme uncertainty, institutional weight seems to offer a refuge.
Ethereum and other cryptocurrencies also affected
The domino effect was not limited to Bitcoin. The second-largest cryptocurrency in the market, ETH, dropped nearly 8% and traded around $1,800 at the end of the day. Surprisingly, Ethereum Spot ETFs only saw $3.59 million in outflows, following the previous day’s $51.24 million.
A climate of risk aversion
Beyond the numbers, this abrupt turnaround illustrates the ongoing correlation between digital assets and traditional markets. Trump’s announcement acted as a wake-up call, bringing back memories of the COVID-related shocks. Investors seeking liquidity sold both stocks and cryptocurrencies, once again illustrating that Bitcoin is not yet universally perceived as a safe haven, despite its notable resistance.
This new episode marks a significant step in the increasing volatility of crypto ETFs. As the geopolitical environment intensifies, investor arbitrage could further amplify the flow movements in these products, which are now fully integrated into global market dynamics.
