BTC-backed ETFs halt 8-day influx following Bitcoin's $95k support loss due to economic unease.
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US Bitcoin ETFs took a dive in April of 2021, witnessing a significant outflow of funds as Bitcoin dipped below the $95,000 support level. The run-down was mainly attributed to fears over Trump's new tariffs, weak U.S. economic data, and disappointing job reports.
According to SoSoValue data, a total of $56.23 million was withdrawn from the 12 spot Bitcoin ETFs on April 30, breaking an eight-day winning streak that added nearly $4 billion. The hardest hit were Fidelity's FBTC and ARK & 21Shares' ARKB, seeing losses of $137.49 million and $130.79 million respectively. Grayscale's GBTC and Bitwise's BITB also suffered losses of $31.96 million and $23.02 million.
In a rare positive note, BlackRock's IBIT, the largest BTC ETF by net assets, managed to register an inflow of $267.02 million, somewhat off-setting the overall losses. The other Bitcoin ETFs remained unaffected that day.
Trading volume across these funds amounted to $2.39 billion, with total net inflows since launch standing at $39.14 billion.
The dip in Bitcoin was evident, especially with investors adopting a cautious approach after the digital currency failed to hold above $95,000. Some reasons included a poor ADP jobs report indicating only 62,000 private sector jobs added in April, a significant dip compared to the anticipated 108,000.
The first estimate for Q1 GDP also came in at a negative 0.3%, missing forecasts of +0.2%. The decline was largely attributed to a 41% increase in imports as businesses rushed to stock up ahead of President Trump's fresh wave of tariffs.
Tariff worries persisted as Trump's administration continued to push for new tariffs on Chinese goods and select European products, aiming to boost U.S. manufacturing. However, there was also a risk of increased costs and supply chain disruptions.
The markets were taking a hit due to Trump's tariff plans, and these concerns fed into broader fears of stagflation – a mix of weak growth and stubborn inflation. As a result, riskier assets such as tech stocks saw losses, with the Nasdaq plunging 2% and the S&P 500 sliding 1.5%. Bitcoin followed suit, dropping 2% to $93,438 before recovering somewhat.
Meanwhile, an intriguing coincidence emerged this April, with $800 million worth of Bitcoin being lost in trash, making headlines as the star of a new docuseries.
[1] Economic Confidence, Pew Research Center, April 2021. [2] U.S. GDP, Bureau of Economic Analysis, April 2021. [3] Inflation rate, Bureau of Labor Statistics, March 2025.
- The weakest economic data and disappointing job reports in July of 2021 might lead to a similar outflow of funds from Bitcoin ETFs, as seen in April.
- The volatile crypto market could be influenced by the fears over potential new tariffs on technology imports, creating uncertainty for investors.
- Amidst the economic downturn, some investors might consider offsetting their losses by investing in crypto ETFs, such as BlackRock's IBIT, which on one rare occasion managed to register an inflow of funds.
- The decline in the U.S. GDP for Q1 2021, as well as the poor job reports, affected not only the Bitcoin ETFs but also the entire financial market, including tech stocks and the Nasdaq.
- The technology sector could face increased costs and supply chain disruptions due to the possible implementation of Trump's tariffs on Chinese goods and select European products, contributing to the overall market weakness.
- As investors seek safer investment opportunities during times of economic uncertainty, decentralized exchanges (DEX) and other token-based investments might gain traction, as they offer potential diversification benefits.
