US Bitcoin ETF Inflows Crash 40% as Stagflation Ghost Haunts Markets

Wall Street’s crypto darling takes a hit—weekly Bitcoin ETF flows just got slashed nearly in half. Turns out even digital gold isn’t immune to old-school economic nightmares.

Behind the numbers: Traders are dumping risk assets faster than a hot potato as stagflation fears creep in. The Fed’s ’higher for longer’ mantra meets crypto’s volatility—perfect storm for skittish capital.

Bonus cynicism: Nothing unites traditional finance and crypto bros like panic selling at the first whiff of trouble. Some hedge against inflation, huh?

Most of last week’s inflows went into BlackRock’s IBIT, which attracted a massive $2.48 billion. Meanwhile, funds like Grayscale’s BTC, VanEck’s HODL, and Invesco’s BTCO saw smaller inflows. 

However, not all funds had a good week. ARK’s ARKB recorded outflows of $457.6 million, while Fidelity’s FBTC lost $201.1 million. Even Grayscale’s GBTC and Bitwise’s BITB recorded net redemptions. The other ETFs stayed mostly flat.

Despite the slower pace last week, April was still a strong month overall, with nearly $3 billion flowing into Bitcoin ETFs. This was a sharp turnaround after two back-to-back months of outflows that had drained over $4.3 billion, signaling renewed demand from institutional investors. 

Ethereum ETFs exhibited a similar trend, with net inflows dropping to $106.75 million last week from $157 million the week before.

What really shook markets was the disappointing U.S. economic data. The April ADP jobs report came in far below expectations, marking the weakest result since July 2024. 

On top of that, the first estimate for Q1 GDP turned negative, despite earlier positive forecasts. A big factor was the surge in imports as businesses rushed to stock up before President Donald Trump’s fresh round of tariffs fully kicked in, adding more pressure on the economy.

These tariff worries have added to growing fears of stagflation, a mix of weak growth and stubborn inflation, making investors unsure about when or how much the Federal Reserve might cut rates.

Earlier, Trump’s claims that trade talks with countries including China were underway briefly lifted market sentiment, helping Bitcoin touch a weekly high of $97,800. The rally offered momentary relief amid tariff uncertainty, but gains quickly faded as inflation data reignited stagflation fears.

As of Monday, Bitcoin’s (BTC) price recovery had stalled, trading between $93,500 and $96,000, with the market’s focus now shifting to the upcoming Federal Open Market Committee (FOMC) interest rate decision.

Economists widely expect the Fed to keep rates steady at 4.5% and maintain a cautious stance since inflation is still running hot.