- Bitcoin ETFs saw a $158M net outflow as institutional investors reduced exposure ahead of Trump’s tariff announcement.
- Market uncertainty intensified, with Ethereum ETFs also recording $3.6M in outflows amid risk-off sentiment.
- Investors are shifting to gold, with 58% of fund managers favoring it over Bitcoin as a safe-haven asset.
The crypto market is treading carefully as traders and investors adopt a wait-and-see approach amid mounting macroeconomic uncertainty. The cautious sentiment is reflected in two consecutive days of net outflows from BTC exchange-traded funds (ETFs), suggesting institutional investors are reducing exposure ahead of a key geopolitical event.
Data from Farside Investors indicates that Bitcoin ETFs have recorded significant net outflows since the start of the week. Monday saw a $60.6 million outflow from ETFs managed by Bitwise (BITB), Ark Invest (ARKB), and WisdomTree (BTCW). Notably, BlackRock’s IBIT was the only Bitcoin ETF to see positive flows on that day.
However, the outflows intensified on Tuesday, reaching nearly $158 million, with Bitwise and Ark Invest leading the charge in capital flight. By April 1, even BlackRock’s IBIT had recorded zero flows, further reinforcing the risk-off sentiment in the market. Meanwhile, Ethereum ETFs also suffered net outflows of $3.6 million, underscoring broader caution among institutional players.
“The Spot Bitcoin ETFs saw a $157.8 million outflow yesterday. The Spot Ethereum ETFs saw a $3.6 million outflow. Institutions are reducing risk ahead of today’s tariff announcement,” noted prominent analyst Crypto Rover.
Bitcoin Faces Volatility as Trump Unveils Tariff Plan
The heightened caution in crypto markets coincides with an impending announcement from former U.S. President Donald Trump on April 2, dubbed “Liberation Day.” The event is expected to unveil a sweeping new tariff policy that could potentially trigger a global trade war.
With the scope of the tariffs still unclear, uncertainty is rippling through financial markets, leaving investors in limbo. According to Bloomberg, “The White House has not reached a firm decision on their tariff plan,” further adding to the market’s anxiety.
Historically, major tariff announcements have had significant impacts on risk assets, including Bitcoin. Some analysts warn that if Trump enforces aggressive trade policies, financial markets including stocks and crypto could face extreme volatility, with potential drawdowns of 10-15%.
“April 2nd is similar to election night. It is the biggest event of the year by an order of magnitude. 10x more important than any FOMC, which is a lot. And anything can happen,” economic analyst Alex Krüger predicted.
Bitcoin Faces Headwinds as Investors Shift
As uncertainty looms, some investors are shifting their capital towards traditional safe-haven assets. A Bank of America survey revealed that 58% of fund managers are favoring gold as a hedge against escalating trade tensions, while only 3% see Bitcoin as a viable alternative.
Bitcoin’s price volatility and limited crisis-time liquidity have often been cited as key barriers preventing it from establishing itself as a true safe-haven asset. Historically, trade war fears have led to capital flight into gold rather than Bitcoin, reinforcing the traditional preference for the precious metal.
While Bitcoin faces near-term headwinds, long-term holders remain undeterred. On-chain data shows that Bitcoin supply on exchanges has dropped to just 7.53%, the lowest level since February 2018. This decline suggests that investors are reluctant to sell, reinforcing confidence in Bitcoin’s long-term potential despite current market uncertainty.
As the crypto market braces for Trump’s Liberation Day announcement, all eyes remain on how the tariff decision could reshape global markets. Will Bitcoin follow gold’s lead as a haven, or will it endure another bout of volatility? One thing is certain April 2 will be a defining moment for financial markets in 2025.
