Bitcoin ETFs Break the Good Streak as Geopolitical Tensions Harm the Market

After being on a highly impressive streak of net inflows, the landscape around the 11 US spot Bitcoin ETFs changed in the past week, perhaps due to the geopolitical tension in the Middle East.

The US spot Bitcoin (BTC) ETFs had a good run recently, attracting a total of $1.1 billion in net inflows over five trading days. Monday (September 23) was particularly impressive, with BTC ETFs attracting $740.2 million in net inflows – the highest single-day net inflows since early June. This helped propel BTC’s price from around $62,000 to over $66,500 in a week.

However, the landscape changed drastically in the past five trading days as investors pulled a total of $274.3 million from the ETFs. This put an end to the eight-day streak of net inflows, with Tuesday seeing outflows of $242.6 million, Wednesday seeing outflows of $64.4 million, and Thursday seeing outflows of $54.2 million.

While Monday and Friday also saw net outflows, with $61.3 million and $25.6 million being pulled, respectively, the week ended in the red for the ETFs.

This shift in investor sentiment coincided with escalating geopolitical tensions in the Middle East, following an attack on an Israeli-linked tanker off the coast of Oman last week. The incident raised concerns about potential retaliation and a wider conflict, leading to increased market volatility.

The impact of the outflows was also evident in BTC’s price movements, with the asset tumbling from around $66,000 last Sunday to as low as $60,000 on Wednesday and Thursday. Despite recovering slightly to around $62,000 at the time of writing, BTC is still more than 5% down for the week.

Meanwhile, the spot Ethereum (ETH) ETFs had a mixed week, with some days seeing net outflows and others seeing net inflows. Overall, a total of $25.4 million was pulled from the ETH ETFs.

Monday started with minor outflows of $0.8 million, while Thursday saw $48.6 million being pulled out. Another $3.2 million was pulled out on Thursday, while investors allocated $19.8 million in net inflows on Wednesday and $7.4 million on Friday.

In comparison to the net outflows for the Bitcoin ETFs, which amounted to $274.3 million, the outflows for the ETH ETFs were significantly less. However, despite this, ETH’s price declined more than BTC’s.

The second-largest digital asset was trading close to $2,700 on Sunday, but it dumped by almost $400 mid-week to bottom out at around $2,300 on Thursday. It has since recovered to around $2,420, but this still marks a decrease of over 8% in a week.

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