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After six consecutive weeks of inflows, U.S. spot Bitcoin exchange-traded funds (ETFs) have recorded a weekly outflow of $157 million. The reversal comes as global markets react nervously to renewed tensions between the United States and China, raising fears of another tariff war. The pullback in ETF demand marks a notable shift after a sustained period of bullish momentum that had brought billions into Bitcoin-linked investment products.
Since mid-April, Bitcoin ETFs have attracted over $9.6 billion in inflows, supporting a strong recovery in BTC’s price from $84,000 to just above $110,000. However, last week’s outflows coincided with a retracement in Bitcoin’s value, which dipped back below the $110K mark. While the market remains fundamentally strong, investors are beginning to factor in geopolitical risks, particularly those involving international trade policies.
The drop in investor sentiment appears tied to mounting trade tensions between the U.S. and China. On June 2, former President Donald Trump alleged that China had breached a preliminary trade agreement established in May. In response, the U.S. announced it would double tariffs on Chinese steel imports to 50% and expand restrictions on Chinese tech companies. China promptly denied the accusations and warned of retaliatory measures to protect its economic interests.
CoinShares’ Head of Research, James Butterfill, noted that investor enthusiasm started off strong last week but quickly faded following legal and political developments related to U.S. trade policy. “The week began with strong inflows for Bitcoin,” Butterfill said. “This reversed mid-week following the New York Court decision to declare U.S. tariffs as illegal, ending the week with minor outflows of US$8 million.”
The most significant outflows came from ETFs managed by Ark 21Shares and Fidelity, two of the leading providers of Bitcoin investment products. While the outflows are not yet large enough to trigger alarm, they mark a potential shift in investor positioning, especially if trade-related risks escalate further in June.
QCP Capital, a Singapore-based crypto trading firm, offered a broader macro perspective on the market outlook. The firm expects tariff tensions to dominate headlines throughout June, warning that investors should brace for more uncertainty until at least mid-July, when major policy updates are expected. “Tariff tensions will likely drive the macro narrative through June, with major policy decisions expected only after July 8. Until then, the market may stay on pause,” QCP noted.
In their report, QCP also emphasized declining volatility in the near term. Metrics like perpetual funding rates and risk reversals are showing signs of normalization, suggesting that Bitcoin may remain range-bound for the time being. The firm predicts BTC will likely trade between $100,000 and $110,000 in the short term, barring any major developments.
Meanwhile, blockchain analytics platform Glassnode has provided additional insights into investor behavior. The firm pointed out that current levels of profit-taking remain relatively modest, though any slowdown in new demand could stall Bitcoin’s upward momentum. “If new demand holds, the BTC rally could continue,” Glassnode stated. “If it fades, the lack of momentum support and rising profit-taking could lead to short-term consolidation.”
At the moment, the market appears to be in a state of cautious optimism. Data indicates that new buyer interest remains strong, while existing holders are not aggressively selling—yet. However, analysts caution that macro-driven volatility could change the dynamic quickly.
The current phase for Bitcoin is likely to be one of consolidation, with the market weighing geopolitical risks against long-term bullish fundamentals. If the trade war narrative continues to gain steam, ETF inflows may remain subdued in the coming weeks, putting pressure on BTC’s price to hold above key support levels.
