Bitcoin ETFs See $1.45B in Outflows as Economic Data Signals Trouble

7d ago•

bullish:

bearish:

U.S.-listed Bitcoin ETFs recorded net outflows for the fourth consecutive trading session on Tuesday, as fresh economic data stoked fears of stagflation a scenario marked by slowing growth and rising inflation, considered highly unfavorable for risk assets.

Data provided by SoSoValue indicates a total of $196 million was taken out of the 11 Bitcoin ETFs, namely Fidelity FBTC and BlackRock IBIT where the most money was withdrawn.

Bitcoin ETFs Record Largest Outflows Since April

It is a continuation of a losing streak which started last Thursday when Bitcoin ETFs reduces by a combined figure of $114.83 million, there were outflows of $812.25 million on Friday and losses of $333.19 million on Monday. The four-day period is the longest streak of net outflows since April of the Bitcoin ETFs.

The exodus is after the recent U.S. ISM Non-Manufacturing PMI, which showed a worrying mix of spiraling inflation, fading employment and trade factors that solidify stagflation fears. The report caused a wider market sell off with the Nasdaq Composite dropping 0.7 percent, recouping its Monday increases.

Fed Rate Cut Expectations Gain Momentum

The largest of the cryptocurrencies by market cap, Bitcoin (BTC) declined over 1 percent to hit a low of $112,650 and then recovered mostly in the vicinity of 114,000 on the CoinDesk basis.

Stagflationary mix in ISM report hit risk assets, analysts at the LondonCryptoClub wrote on X (formerly Twitter). Employments in services are declining, new bookings and activities are hardly growing and prices are increasing. Stagflation is the worst-case scenario because it interferes with the Fed ability to lower the rates to stimulate growth.

Stagflationary mix on the ISM knocking risk here

Services employment contracting, new orders and activity barely expanding, prices rising

Stagflation of course is the most toxic combination for risk IF it prevents the Fed being able to cut rates to cushion slowing growth

Given… https://t.co/W3U79Nt4DJ

— LondonCryptoClub (@LDNCryptoClub) August 5, 2025

Inflated market expectations that the Federal Reserve will cut rates have increased on the basis of last Friday’s disappointing nonfarm payrolls report to indicate further weakness of the labor market.

Bitcoin ETFs Await Relief From Fed Decision

According to Bloomberg, options linked to the Secured Overnight Financing Rate currently price in the possibility of rate decreases on all three remaining meetings of the Fed this year, which may amount to 75 basis points.

LondonCryptoClub suggested that such a growing risk to economic growth and employment ought to be sufficient to force the Fed to start easing rates by at least September which would provide some relief to the Bitcoin ETFs and other crypto-based investment commodities.

SEC Guidance Boosts Ethereum ETF Sentiment

Although Bitcoin ETFs still experienced the outflows, Ether (ETH) ETFs defied the odds, sending it to a two-day losing streak as it experienced net inflows of $73.22 million.

The investor sentiment change can be seen as emerging due to a recent U.S Securities and Exchange Commission (SEC) guidance, which shows that, in some circumstances, staking and accepting tokens does not amount to a securities offering.

The ETF Store and NovaDius Wealth Management president, Nate Geraci, commented that the stance of the SEC probably cleared one of the regulatory necessities, leading to the approval of the spot Ether ETFs with staking functions. Meanwhile, high global uncertainty might further push BTC ETFs in the short-term, since the macroeconomic conditions seem to strain overall market sentiment.

SEC says certain liquid staking tokens are NOT securities…

Think last hurdle in order for SEC to approve staking in spot eth ETFs.

The reason?

Liquid staking tokens will be used to help manage liquidity w/in spot eth ETFs, something that was a concern for SEC. pic.twitter.com/tKJbEoQVNp

— Nate Geraci (@NateGeraci) August 5, 2025

Conclusion

Based on the latest research, Bitcoin ETFs remain under pressure amid mounting stagflation concerns and persistent outflows. However, growing expectations of Fed rate cuts by September could offer a potential turning point. As macroeconomic uncertainty unfolds, investor sentiment around BTC ETFs may hinge on policy shifts and broader market stabilization.

For more expert reviews and crypto insights, visit our dedicated platform for the latest news and predictions.

Summary

U.S.-listed spot Bitcoin ETFs saw $196 million in outflows on Tuesday, marking the fourth consecutive day of redemptions amid rising stagflation fears triggered by weak service sector data. Major funds such as Fidelity FBTC and BlackRock IBIT headed the withdrawals. Meanwhile, Ether ETFs ended the day with inflows of 73.22 million buoyed by new SEC guidelines on staking that may enable the approval of spot Ether ETFs with staking functionality.