According to SoSoValue, the combined outflow of funds from Bitcoin ETFs in the United States reached a record level for the day on Thursday since August by totaling $536.4 million. The important disinvestment reflects increasing investor caution in the face of the macroeconomic environment and geopolitical tensions.
Only twelve spot bitcoin ETFs were there to witness a withdrawal in their share of the money, while Ark & 21Shares’ ARKB was the most significant outflow in a money withdrawal position at $275.15 million. Fidelity’s FBTC was a close second, losing $132 million, whereas funds managed by BlackRock, Grayscale, Bitwise, VanEck, and Valkyrie also experienced outflows.
The situation was not any better for spot Ethereum ETFs, which saw net outflows of $56.9 million, thus, canceling their two previous sessions’ gains.
Nick Ruck, a Director at LVRG Research, observed, “The net outflows of $536 million mostly indicate a sudden and steep risk aversion by investors. This cautious stance might be instigated by a mixture of macroeconomic factors – e.g., changing US tariff policy, and a broad market deleverage event leading to the occurrence of hefty crypto liquidations that in turn have a considerable part in the overall sell-off of crypto assets.”
The recent round of withdrawals fits with the historic crypto liquidation event that wiped out over $20 billion of leveraged positions and had a hard impact on 1.5 million traders worldwide. It was the liquidation that followed after Donald Trump’s administration in the US made a move to impose 100% tariffs on Chinese imports, thus releasing renewed volatility waves across the global markets, which was the trigger.
Therefore, traders have gone on the defensive mode, with crypto and other risky assets of the market responding significantly to the ongoing trade talks between the US and China.
Ruck pointed out that the continuation of ETF outflows could constitute a warning sign of short-term market instability, thus implying the possibility of further price drops if risky sentiment remains negative.
Some analysts, despite the market turbulence, think that the medium-term perspective is still positive. Justin d’Anethan, Head of Research at Arctic Digital, said: “We are seeing a market that is stabilizing but is still affected by the uncertainty of geopolitical issues and a tight monetary policy which has not yet been reversed.”
Bitcoin fell 2.36% over the last 24 hours to $108,360, and Ether lost 2.56% to $3,900, as per The Block data.
D’Anethan went on to say: “From a structural point of view, the story of inflation is weakening, and central banks are getting close to their turning point. However, we should still see a lot of volatility until we get clearer and definite CPI figures, policy statements or progress in the diplomatic area that can be trusted.”
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