Investor aversion to risk assets amid escalating trade tensions and economic uncertainties has triggered a downward spiral in the crypto markets. The situation is worsened by President Trump’s re-imposition of tariffs on goods from Mexico and Canada. This development has unsettled investors, causing them to retreat from risk assets.
In the wake of these circumstances, US spot Bitcoin Exchange Traded Funds (ETFs) have registered net outflows of roughly $935 million on Tuesday. This figure extends their losses for the week to approximately $1.5 billion. These massive withdrawals have occurred during a significant crypto market sell-off.
Fidelity’s FBTC led the outflows with approximately $344 million, according to data compiled by Farside Investors and Trader T. It was closely followed by BlackRock’s IBIT, which experienced nearly $162 million in redemptions. Bitwise’s BITB and Grayscale’s BTC also witnessed substantial net outflows exceeding $85 million each. Franklin Templeton’s EZBC, Grayscale’s GBTC, and Invesco’s BTCO saw their funds decline by $74 million, $66 million, and $62 million respectively.
Tuesday’s severe outflows have surpassed the previous record set on Dec. 19, when spot Bitcoin ETFs experienced withdrawals reaching $672 million. This followed Bitcoin’s fall below $97,000. The recent withdrawals marked the sixth consecutive day of outflows for the ETF group, which saw $539 million withdrawn on Monday.
As of today, Bitcoin has dipped to $86,000, its lowest level since November. It currently trades at $88,000, a decrease of 7% over the past week. The overall crypto market cap has also declined by 3.5% in the last 24 hours.
The slump across all assets has led to $1.6 billion in leveraged liquidations on Monday, as reported by Crypto Briefing. Former BitMEX CEO, Arthur Hayes, has warned of a potential market downturn as hedge funds unwind their basis trades involving Bitcoin ETFs.
With investor sentiment in the crypto markets plummeting, the Crypto Fear and Greed Index, a measure of market sentiment, has fallen from 25 to 21, putting it firmly in the “extreme fear zone.” As the global economy faces mounting uncertainties, the crypto market is experiencing the ripple effects with investors increasingly cautious and preferring safer investment options.
