Key Points
- On March 3, the U.S. spot Bitcoin ETFs saw outflows due to risk-off sentiment and skepticism over a U.S. crypto reserve fund.
- Ethereum ETFs also recorded their eighth consecutive day of outflows on the same day.
On March 3, the U.S. spot Bitcoin ETFs experienced a reversal back to outflows. This was due to a risk-off sentiment triggered by trade tensions and doubts about a U.S. crypto reserve fund.
SoSoValue data shows that the 12 spot Bitcoin ETFs returned to their outflow trend on Monday. They saw $74.19 million leave the funds after a previous day of net inflows totaling $94.34 million.
Leading the Outflows
BlackRock’s IBIT led the outflows for the third day in a row, 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 Grayscale’s GBTC also continued its outflow trend with $54.39 million withdrawn by investors.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 went against the trend with $58.18 million in net inflows, while the remaining nine Bitcoin ETFs saw no activity on the day.
The total daily trading volume for these investment products stood at $5.99 billion on March 3. Since their launch, total net inflows have amounted to $36.97 billion.
Ethereum ETFs Follow Suit
The nine Ethereum ETFs also saw their eighth consecutive day of outflows on the same day, with $12.10 million exiting the funds. The negative flow was led by BlackRock’s ETHA, which saw investors withdraw $16.06 million. Some of these outflows were offset by $3.96 million in inflows into Bitwise’s ETHW fund.
These significant outflows from the ETFs occurred amidst a risk-off sentiment among investors. This was driven by the confirmation from U.S. President Donald Trump that the U.S. will impose 25% tariffs on Canada and Mexico starting March 4. This eliminated hopes for a last-minute deal that could have eased trade tensions. In response, both countries have pledged to retaliate. Additionally, a 10% tariff on Chinese imports will take effect on the same day.
Further concerns arise from Trump’s announcement of plans to establish a U.S. Crypto Strategic Reserve. This would consist of a basket of crypto assets, including Bitcoin and Ethereum, as the core holdings. While the initiative aims to position the U.S. as the “Crypto Capital of the World,” it has drawn criticism from the crypto community. Many argue that it contradicts Bitcoin’s core principle of decentralization.
Market Reactions
Bitcoin, which surged 11% to an intraday high of $94,770 on Monday, retraced 9.5% to trade at $84,011 at press time. This was as investors adopted a risk-off stance amid escalating trade tensions and concerns over the feasibility of the strategic reserve plan. Ethereum also suffered a blow, dropping 13.8% over the past day to $2,098 at the time of writing.
Matt Mena, a crypto research strategist at 21Shares, commented on Bitcoin’s recent volatility. He stated that the market reaction is driven by “renewed fears of inflation and economic uncertainty.” However, he believes the sell-off is an overreaction.
According to Mena, many investors anticipated this move. As futures markets adjust overnight, Bitcoin could find stability when trading resumes. “When the market opens [on March 4], we’ll likely see this stabilize as the futures market corrects for today’s move,” he said. 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.”