Last week was a rough one for crypto investors. Over $240 million was pulled out of crypto investment products, as fears grew around new U.S. trade tariffs announced by former President Donald Trump. These tariffs are raising concerns about the global economy and pushing investors to play it safe.
What Triggered the Crypto Sell-Off?
A report by CoinShares shows that the sell-off was likely a reaction to Trump’s newly proposed tariffs, which many believe could slow down global trade and hurt economic growth.
“People are worried that these tariffs will hurt the world economy, so they’re pulling money out of risky assets like crypto,” said CoinShares analyst James Butterfill.
Just how bad was it?
- Bitcoin alone saw $207 million leave the market.
- Ethereum lost $37.7 million.
- Other coins like Solana and Sui saw smaller but still significant losses of $1.8 million and $4.7 million.
This is a sharp change from the previous week when crypto products, especially altcoins, were actually seeing positive inflows of around $18 million after a month-long losing streak.
Why the Tariffs Are Causing Panic
These outflows happened mostly in the United States, where investors pulled $210 million out of crypto. The reason? Trump’s new trade policies.
Here’s what he announced:
- Starting April 5, a 10% tax on all imported goods into the U.S. — this affects nearly every country that sells goods to America.
- From April 9, even higher tariffs (from 11% to 50%) will be added on countries with big trade surpluses or those that block U.S. products.
Some examples:
- China: Already facing a 20% tax, now hit with an extra 34%, bringing the total to 54%.
- EU countries: Up to 20%.
- Japan: 24%.
- Vietnam: As high as 46%.
Not surprisingly, China hit back, accusing the U.S. of “economic bullying.” This trade war-style tension is making investors nervous across all markets, not just crypto.
U.S. Bitcoin ETFs Lose $172 Million in Just One Week
The fear was especially clear in the U.S. spot Bitcoin ETF market. These are funds that let big investors buy into Bitcoin without actually holding the coin themselves. Last week:
- $172.89 million was pulled out of Bitcoin ETFs.
- Grayscale’s GBTC lost the most, with $95.5 million in outflows.
- Other funds like WisdomTree, BlackRock, Bitwise, and ARK also saw millions pulled.
Even though April 3 saw a brief $220 million inflow, the rest of the week’s losses wiped it out. Tuesday alone had a whopping $157 million in outflows.
Investor Sentiment Is Shifting – But Is It Long-Term?
This isn’t the first time global issues have shaken the crypto market. Back in 2022, when inflation and interest rate hikes were on the rise, crypto saw a sharp decline — Bitcoin dropped from nearly $69,000 to under $20,000 in a few months.
Now, Ethereum ETFs are also showing signs of weakness:
- They’ve seen $800 million pulled out since February.
- Last week alone: $49.93 million in outflows.
But not everything is doom and gloom.
Some funds like Franklin Templeton, Fidelity, and Grayscale’s newer trust saw $61.8 million flow in — a sign that some investors still see potential.
