US Political Instability Challenges Market Confidence as Crypto ETFs Face Withdrawals
Political unrest in the US contributes to continued outflows from Bitcoin and Ethereum ETFs, as market participants react to uncertainty.
US spot Bitcoin and Ethereum exchange-traded funds (ETFs) experienced continued net outflows on Monday, reflecting fragile investor sentiment amid escalating political and economic uncertainties.
According to data from SoSoValue, Bitcoin ETFs faced withdrawals totaling $40.47 million on Monday, marking their fourth straight day of losses. Leading the downturn was BlackRock’s IBIT, which reported a drop of $100.65 million, while Fidelity’s FBTC and Bitwise’s BITB managed incremental inflows of $9.67 million and $12.05 million.
The cumulative net inflow for spot Bitcoin ETFs has now reached $61.50 billion, even as total net assets dipped to $149.66 billion, roughly 6.76% of Bitcoin’s market cap.
Similarly, spot Ether (ETH) ETFs recorded $145.68 million in daily outflows, continuing a troubling trend for a third consecutive day. BlackRock’s ETHA noted the largest single withdrawal of $117.86 million, while Fidelity’s FETH faced a decrease of $27.82 million.
Spot Bitcoin ETFs see fourth day of outflows. Source: SoSoValue
The ongoing outflows correlate with rising political turmoil in the US, as protests labeled “No Kings” unfolded nationwide, coinciding with the government’s shutdown entering its 18th day. Demonstrators accused the current administration of veering towards authoritarianism.
From New York’s Times Square to Los Angeles and Portland, protesters voiced chants of “Resist Fascism” and “We the People Rule”, as reported by Politico.
Analysts at Bitunix shared insights with Cointelegraph, suggesting that the political situation creates not just a public sentiment struggle but also tests institutional confidence. They warned that prolonged shutdowns could disrupt not only liquidity but also trust in systemic structures. “The market’s next move may hinge on whether the political landscape can foster unity amid significant divisions,” they stated.
Meanwhile, Vincent Liu, chief investment officer at Kronos Research, explained that these ETF withdrawals signify a wider phase of de-risking by investors. “The erosion of trust in policy stability is pushing capital toward safer investments,” he noted.
Looking forward, Liu anticipates that market volatility will remain elevated as participants seek clearer policy guidance. A more stable macroeconomic outlook or reduced political friction could help restore investor confidence and turn ETF inflows positive.
