US Bitcoin ETFs see $225M outflows amid geopolitical tension
US spot Bitcoin ETFs recorded their first net outflows since mid-July as escalating US-Iran tensions triggered a broader market sell-off and renewed investor fear.
US-listed spot Bitcoin ETFs recorded $225.2 million in net outflows on Thursday, snapping a seven-session inflow streak that had previously attracted nearly $1 billion. According to SoSoValue, this represents the funds' first daily net outflow since July 13.
The sudden reversal in capital flows coincided with a broader sell-off in US equities driven by renewed tensions between the US and Iran. As traditional risk assets declined, Bitcoin slipped below $65,000, hitting an intraday low of $64,600 before recovering to trade at $65,403, CoinGecko data shows.
This price action highlights the continued sensitivity of digital assets to macroeconomic and geopolitical shocks. Market psychology clearly deteriorated, with the Crypto Fear & Greed Index dropping 3 points to 28 on Friday. The gauge remains deep in "fear" territory, according to Alternative.me.
For portfolio managers, the sudden outflows serve as a reminder that Bitcoin ETFs are currently functioning as high-beta risk assets rather than independent stores of value. When geopolitical uncertainty rises, these instruments are still subject to immediate liquidity withdrawals by investors seeking to reduce overall portfolio volatility.
However, the scale of the outflows suggests the drawdown was a tactical rotation rather than a structural exit. Despite losing $225.2 million in a single session, the spot Bitcoin ETFs retained roughly $274 million in net inflows for the week as of Thursday's close.
Interestingly, the risk-off sentiment did not uniformly impact the digital asset complex. US-listed spot Ether ETFs defied the broader trend, extending their inflow streak to five consecutive days with $26.3 million in net inflows on Thursday, per SoSoValue.
This divergence between the two largest crypto funds indicates that while investors are actively managing downside risk on their primary Bitcoin positions, they are maintaining steady, incremental exposure to Ether.
