Bitcoin and Ether Exchange-Traded Funds (ETFs) experienced notable outflows on Friday, as rising core inflation sent ripples through the financial world. This uptick in inflation, seemingly fueled by the lingering effects of tariffs introduced during the Trump administration, has investors on edge, reevaluating their positions in the volatile crypto market.
Inflation’s Impact on Crypto ETFs
The recent report from the Federal Reserve highlighted a concerning rise in core inflation, a metric excluding food and energy prices, which many attribute to the enduring tariffs from the Trump era. These tariffs, aimed at bolstering domestic industries, have had a lasting impact on import prices, trickling down to consumers and unsettling the financial markets.
Crypto ETFs, particularly those tied to Bitcoin and Ether, have felt the pinch. “It’s a classic case of risk aversion,” noted Jamie Reynolds, a senior analyst at Market Insights. “When inflation rears its ugly head, investors tend to pull back from high-risk assets like cryptocurrencies, seeking refuge in more stable investments.” This trend aligns with recent analyses, such as the Bitcoin Weekly Forecast: BTC Correction Amid Over $1 Billion ETF Outflows, which highlights the scale of outflows amid market volatility.
Indeed, the outflows in Bitcoin and Ether ETFs reflect a broader flight to safety among investors. This pattern is not entirely unexpected, as digital assets are often seen as speculative and sensitive to macroeconomic changes.
The Tariff Legacy: A Double-Edged Sword
The tariffs introduced during the Trump administration were intended to protect American jobs and industries. However, they also appear to have contributed to a complex economic landscape, affecting everything from supply chains to consumer prices. As inflation ticks upward, the ripple effects are undeniable.
“While the tariffs were designed to be a buffer for American businesses, they’ve inadvertently become a catalyst for inflation,” explained Laura Chen, an economist at Future Trends Advisory. “The rising costs of imports can lead to higher prices across the board, which we’re now seeing in the form of increased inflation.”
This inflationary pressure has investors reconsidering their strategies—especially in the crypto market, where volatility is the norm rather than the exception.
Market Sentiment and Future Projections
Market sentiment has been a mixed bag as of late. While some investors remain bullish on the long-term potential of cryptocurrencies, others are wary of the short-term volatility exacerbated by macroeconomic factors such as inflation and geopolitical tensions. This sentiment is echoed in Bitcoin, Ether ETF Flows Hint at Incoming Altcoin Bull Run: Crypto Daybook Americas, which suggests potential shifts in investor focus.
“There’s a lot of uncertainty right now,” said Tom Pritchard, a portfolio manager with a focus on digital assets. “Inflation, tariffs, and even regulatory changes are all playing a part in how investors are viewing crypto ETFs. It’s a wait-and-see approach for many.”
What’s next for the crypto market remains an open question. With the Federal Reserve closely monitoring inflation and potential interest rate adjustments on the horizon, investors are left to ponder their next moves. Will the crypto market weather this storm, or are we on the brink of more significant outflows?
As August draws to a close, the financial landscape is fraught with uncertainties, and the coming months promise to be pivotal. Investors and analysts alike will be watching closely, ready to adapt to whatever twists and turns the market might present.
Source
This article is based on: Spot BTC, ETH ETFs see outflows as inflation ticks up under Trump tariffs
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
