Spot Bitcoin ETFs in the U.S. Shift Back to Outflows Amid Risk-Off Sentiment

Spot Bitcoin ETFs in the U.S. have resumed their outflow trend, with $74.19 million exiting the funds on March 3. This shift comes as Bitcoin retraced its gains, driven by a risk-off sentiment stemming from trade tensions and skepticism over a U.S. crypto reserve fund.

Outflows Lead by BlackRock’s IBIT and Grayscale’s GBTC

The 12 spot Bitcoin ETFs saw outflows on Monday, with BlackRock’s IBIT leading the way for the third consecutive day, with $77.97 million in net redemptions. Grayscale’s GBTC also continued its outflow trend, with $54.39 million withdrawn by investors. However, ARK and 21Shares’ ARKB bucked the trend with $58.18 million in net inflows.

Ethereum ETFs Record Eighth Consecutive Day of Outflows

The nine Ethereum ETFs recorded their eighth consecutive day of outflows, with $12.10 million exiting the funds. BlackRock’s ETHA led the negative flow, with investors withdrawing $16.06 million. Some of these outflows were offset by $3.96 million in inflows into Bitwise’s ETHW fund.

Risk-Off Sentiment Driven by Trade Tensions and U.S. Crypto Reserve Fund

The significant outflows from these ETFs come amid a risk-off sentiment among investors, driven by U.S. President Donald Trump’s confirmation of 25% tariffs on Canada and Mexico, and a 10% tariff on Chinese imports. Additionally, concerns stem from Trump’s announcement of plans to establish a U.S. Crypto Strategic Reserve, which has drawn criticism from the crypto community.

Key concerns include:

  • The initiative’s potential to contradict Bitcoin’s core principle of decentralization
  • The risk of a currency designed to be free from government control being subject to U.S. government actions

Bitcoin and Ethereum Prices Drop Amid Escalating Trade Tensions

Bitcoin and Ethereum prices have taken a hit, with Bitcoin retracing 9.5% to trade at $84,011 and Ethereum dropping 13.8% to $2,098.

“Renewed fears of inflation and economic uncertainty” are driving the market reaction, according to Matt Mena, crypto research strategist at 21Shares. However, he believes the selloff is an overreaction and that the market will likely stabilize as the futures market corrects.

While short-term price swings due to macroeconomic events like tariffs may continue, Mena believes these developments are ultimately laying the groundwork for “long-term growth and mainstream financial integration.”

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