Cautious Investors Pull $222 Million from Bitcoin and Ethereum ETFs Before Tariff Decision

Bitcoin ETFs (exchange-traded funds) continue to record negative flows this week as President Trump’s Liberation Day countdown continues.

Sentiment is cautious across crypto markets, with traders and investors adopting a wait-and-see approach.

Bitcoin ETF See Outflows Amid Investor Caution

Data on Farside Investors shows two consecutive days of net outflows for Bitcoin ETFs since Monday. Financial instruments from Bitwise (BITB), Ark Invest (ARKB), and WisdomTree (BTCW) were in the frontline for Monday’s $60.6 million outflows, with only BlackRock’s IBIT seeing positive flows.

Meanwhile, Tuesday saw even more outflows, approaching $158 million, with Bitwise and Ark Invest leading the charge. Then, on April 1, BlackRock’s IBIT recorded zero flows. Meanwhile, Ethereum ETFs recorded net outflows of $3.6 million, data on Farside shows. This suggests a cautious sentiment among institutional investors.

“The Spot Bitcoin ETFs saw $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,” analyst Crypto Rover noted.

Bitcoin ETF flows. Source: Farside Investors

Indeed, sentiment suggests traders are exercising caution, choosing to remain in “wait-and-see” mode. The caution comes ahead of Trump’s Liberation Day announcement, which is due later in the day on April 2.

With POTUS poised to unveil sweeping new tariffs, traders and investors across financial playing fields wait to see the scope of an onslaught that could spark a global trade war. Specifically, there is generally very little information about the tariffs’ specifics, which creates uncertainty regarding their impact on the broader economy and the crypto market. 

“The White House has not reached a firm decision on their tariff plan,” Bloomberg reported, citing people close to the matter.

Despite the lack of clarity, it is understandable why investors would be cautious considering the impact of previous tariff announcements on Bitcoin price. Meanwhile, analysts predict extreme market volatility, with potential stock and crypto crashes reaching 10-15% if Trump enforces broad tariffs.

“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.

While sentiment is cautious in the crypto market, some investors are channeling toward gold as a safe haven. A Bank of America survey showed that 58% of fund managers prefer gold as a trade war safe haven, while only 3% back Bitcoin.

These findings came as institutional investors cite Bitcoin’s volatility and limited crisis-time liquidity as key barriers to its safe-haven adoption. Trade tensions have historically driven capital into safe-haven assets.

With Trump’s Liberation Day announcement looming, investors preemptively position themselves again, favoring gold over Bitcoin.

Nevertheless, despite Bitcoin’s struggle to capture institutional safe-haven flows, its long-term narrative remains intact. This is seen with Bitcoin supply on exchanges dropping to just 7.53%, the lowest since February 2018.

Bitcoin supply on exchanges. Source: Santiment

When an asset’s supply on exchanges reduces, investors are unwilling to sell, suggesting strong long-term holder confidence.