BTC ETFs Post Multi-Day Withdrawals as Stagflation Worries Rattle Broader Markets

Bitcoin ETFs Log $196M in Outflows as Stagflation Concerns Rattle Risk Assets; Ether ETFs Attract $73M

U.S.-listed spot bitcoin ETFs posted net outflows of $196 million on Tuesday, extending a four-day losing streak as investors reacted to fresh signs of stagflation risks in the economy. Fidelity’s FBTC and BlackRock’s IBIT accounted for the bulk of the withdrawals, according to data from SoSoValue.

Since Thursday, total outflows have reached nearly $1.46 billion—the longest stretch of redemptions since April. The sell-off accelerated following Friday’s weak jobs data and Tuesday’s downbeat U.S. services PMI, which flagged inflationary pressures, slowing demand, and weakening employment.

The report added fuel to fears of stagflation—a scenario considered especially harmful for risk assets like cryptocurrencies and tech stocks. Bitcoin fell over 1% to a session low near $112,650 before recovering slightly to around $114,000. The Nasdaq slid 0.7%, reversing Monday’s modest rebound.

“Stagflationary mix on the ISM knocking risk here,” analysts at LondonCryptoClub posted on X, citing contracting employment, soft new orders, and rising prices as a “toxic combination” that could limit the Federal Reserve’s flexibility on rate cuts.

Despite the risk-off tone, expectations for Fed easing continue to rise. Options tied to the Secured Overnight Financing Rate (SOFR) now imply 75 basis points of rate cuts across the three remaining FOMC meetings in 2025, per Bloomberg.

LondonCryptoClub said rising risks to both growth and employment could prompt a first cut as early as September.

Ether ETFs Reverse Outflows, Gain $73M on Regulatory Shift

While bitcoin ETFs faced persistent redemptions, ether-based ETFs saw a reversal, attracting $73.22 million in inflows—their first positive day after two sessions of losses.

The shift comes after the SEC issued guidance suggesting that certain staking activities and token rewards may not classify as securities offerings. This regulatory clarity appears to have improved investor confidence in ETH-related products.

Nate Geraci, president of NovaDius Wealth Management, said the guidance removes a major regulatory obstacle and paves the way for spot ether ETF approvals—although likely without staking features.