Why Bitcoin ETF trading volume exploded to $9.7B as trade war fears hit
Bitcoin ETFs noticed a surge in trading exercise on Friday and Monday, with mixed volumes reaching $9.7 billion and $6.7 billion as tariff headlines rattled threat markets.
BlackRock’s IBIT alone dealt with over $6.9 billion on Oct. 10 (its second-highest day ever), as traders repositioned across the day’s worth volatility.
Bitcoin ETF volume surge
This dramatic uptick in trading volume, far surpassing typical each day averages of $2-3 billion, indicators a frenzy of shopping for and promoting reasonably than simple accumulation.
Spot Bitcoin ETFs have turn out to be a go-to car for institutional and retail traders searching for publicity to BTC with out direct custody hassles. But why the explosion now? The wrongdoer lies in an ideal storm of macroeconomic shocks, particularly escalating tariff threats from US policymakers.
On Oct. 10, headlines about potential 60% tariffs on Chinese imports despatched shockwaves by international threat belongings, amplifying fears of trade wars and inflation spikes.
Being a hedge in opposition to fiat debasement and a high-beta threat asset, Bitcoin plunged practically 18% intraday from $122,600 to $102,546, its sharpest drop in months.
This volatility created ripe alternatives (and requirements) for trading. Investors rushed to ETFs to execute speedy trades: long-term fund holders trimmed positions to lock in positive factors from BTC’s summer season rally above $125,000, whereas opportunistic merchants piled in on the dip, betting on a rebound.
Short-term speculators amplified the chaos, with leveraged performs on platforms like CME futures spilling over into ETF liquidity.
The consequence? Turnover skyrocketed as shares modified fingers a number of instances. Unlike calmer intervals, the place ETF volumes mirror regular inflows, this spike seems to be like pure adrenaline: merchants utilizing the low-fee, regulated construction of merchandise like IBIT (0.25% expense ratio) as a frictionless on-ramp to BTC volatility.
However, the spike in volume up to now two trading days is in stark distinction with ETF inflows. Farside data confirmed that on Oct. 10, web outflows had been simply -$5.7 million, whereas volumes hit $9.67 billion. Net exercise remained subdued even on Oct. 13, with volumes at $6.67 billion.
This hole illustrates a key distinction: trading volume gauges gross exercise (whole shares traded), typically inflated by back-and-forth churn throughout swings, whereas web inflows measure true capital addition after redemptions. In risky instances, the previous surges as merchants react, however the latter lags until sentiment shifts durably bullish.
This sample isn’t new however has intensified post-ETF launch.
In March 2025’s bull run, volumes and inflows synced at $15-20 billion days, fueled by pension funds allocating anew. Tariff fears, nevertheless, evoke 2022’s macro rout, the place BTC volumes spiked 5x with out web positive factors.
By Monday, Oct. 13, as mud settled and BTC rebounded to $115,250 (up 2.3%), volumes eased, suggesting exhaustion. IBIT nonetheless dominated at $4.72 billion, however the frenzy waned as markets digested the information.
Outflows jumped to $326.4 million on Oct.13 as a result of the mud had settled, and warning took over. Bitcoin rebounded barely to $115,250 (up 2.3% from the Oct. 10 shut), letting some traders money out positive factors.
Weekend crypto liquidations topped $20 billion, fueling broader concern of trade wars and inflation. Institutions de-risked by pulling cash out forward of extra headlines, even as trading volume dropped to $6.7 billion. In brief, the preliminary chaos hid balanced flows; the calm after let sellers dominate.
In the approaching weeks, persistent tariff rhetoric may maintain elevated volumes, pressuring the $111,000 Bitcoin price at press time. If trade tensions escalate, count on extra “flight to volatility” trades, doubtlessly pushing ETF turnover towards $10 billion routinely.
Yet, with out corresponding inflows above $750 million each day, sustained worth upside might hinge on broader macro aid.
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