Over $800M Lost by Bitcoin ETFs in April as Institutions Shift Focus to Bonds During Tariff Turbulence

U.S.-listed Bitcoin ETFs are on track to experience their second-largest monthly outflow on record in April, with over $800 million expected to leave the funds. This follows a tough start to the year, with February seeing a record $3.56 billion in outflows and March a more modest $767 million.

While some crypto proponents argue that recent tariff-induced volatility in the U.S. Treasury market highlights vulnerabilities in the dollar-based financial system, institutional investors remain largely unconvinced. A popular social media post last week called for a “Sell bonds, buy Bitcoin” approach, but the reality is that many institutions are opting for safer options.

In contrast to the weakening Bitcoin ETF inflows, demand for U.S. Treasury bills is soaring. On Monday, the U.S. Treasury successfully auctioned $80 billion in three-month bills at an interest rate of 4.225%, slightly higher than the previous auction rate of 4.175%. Similarly, $68 billion in six-month bills were sold at an interest rate of 4.06%, up from 4.00%.

Notably, the bid-to-cover ratios for these bills reached impressive levels. For three-month bills, the ratio surged to 2.96, up from 2.82, meaning nearly three times as many bids were placed as there were bills offered. The six-month bills saw a smaller increase, with the ratio rising to 2.90 from 2.79.

These numbers underscore that institutional investors continue to flock to U.S. debt as a reliable, low-risk asset in uncertain times. Treasury bills are seen as a safe haven, with high liquidity and low risk, making them ideal for short-term funding via the repo market.

The preference for bonds over Bitcoin ETFs reflects a broader caution among institutions, especially as the U.S. economy grapples with heightened uncertainty. President Trump’s aggressive trade policies have escalated market volatility, and corporate earnings guidance has become increasingly unreliable. Bank of America’s 3-month guidance ratio has fallen to 0.4x, the weakest since April 2020, indicating that many companies are providing less predictable outlooks.

Meanwhile, the likelihood of a U.S. recession has surpassed 50% on betting platforms, compounding the risk aversion felt by institutional investors. Additionally, rising bond yields in Japan further complicate the landscape for risk assets, including Bitcoin.