Bitcoin ETFs Bleed Millions for 4th Straight Day as U.S. Stagflation Fears Weigh on BTC and Stocks
Investor anxieties surrounding stagflation fueled a fourth consecutive day of net outflows from U.S.-listed spot Bitcoin (BTC) exchange-traded funds (ETFs). A total of $196 million was withdrawn on Tuesday, extending a trend that began Thursday and totaling over $1.6 billion in outflows. Fidelity’s FBTC and BlackRock’s IBIT bore the brunt of these withdrawals.
This negative sentiment stems from the release of the U.S. ISM Non-Manufacturing PMI, revealing inflationary pressures driven by tariffs, weak employment figures, and trade disruptions. This data points towards stagflation – a scenario detrimental to risk assets, including cryptocurrencies and tech stocks. Consequently, the Nasdaq fell 0.7%, reversing Monday’s gains, while Bitcoin dipped below $113,000.
The LondonCryptoClub highlighted the implications of this “stagflationary mix,” emphasizing the detrimental effects on risk assets, particularly if it prevents the Federal Reserve (Fed) from implementing rate cuts to mitigate economic slowdown. Expectations of Fed rate cuts have increased following Friday’s disappointing nonfarm payrolls report, signaling labor market weakness. Bloomberg data, analyzing Secured Overnight Financing Rate (SOFR) options, suggests potential rate cuts at each of the Fed’s remaining three meetings this year, totaling a possible 75 basis points reduction in 2025. The LondonCryptoClub anticipates a September rate cut due to escalating growth and employment risks.
Conversely, Ether (ETH) ETFs experienced a $73.22 million inflow, ending a two-day outflow streak. This positive trend is likely attributed to the SEC’s recent guidance clarifying that staking activities and token receipt, under specific conditions, do not constitute securities offerings. This clarification removes a significant regulatory hurdle for the approval of spot Ether ETFs incorporating staking, as noted by Nate Geraci of NovaDius Wealth Management. The contrasting performance of BTC and ETH ETFs underscores the market’s nuanced response to macroeconomic factors and regulatory developments.
