Why Bitcoin ETF trading volume exploded to $9.7B as trade war fears hit
Bitcoin ETFs saw a surge in trading activity on Friday and Monday, with combined volumes reaching $9.7 billion and $6.7 billion as tariff headlines rattled risk markets.
BlackRock’s IBIT alone handled over $6.9 billion on Oct. 10 (its second-highest day ever), as investors repositioned around the day’s price volatility.
Bitcoin ETF volume surge
This dramatic uptick in trading volume, far surpassing typical daily averages of $2-3 billion, signals a frenzy of buying and selling rather than straightforward accumulation.
Spot Bitcoin ETFs have become a go-to vehicle for institutional and retail investors seeking exposure to BTC without direct custody hassles. But why the explosion now? The culprit lies in a perfect storm of macroeconomic shocks, specifically escalating tariff threats from US policymakers.
On Oct. 10, headlines about potential 60% tariffs on Chinese imports sent shockwaves through global risk assets, amplifying fears of trade wars and inflation spikes.
Being a hedge against fiat debasement and a high-beta risk asset, Bitcoin plunged nearly 18% intraday from $122,600 to $102,546, its sharpest drop in months.
This volatility created ripe opportunities (and necessities) for trading. Investors rushed to ETFs to execute rapid trades: long-term fund holders trimmed positions to lock in gains from BTC’s summer rally above $125,000, while opportunistic traders piled in at the dip, betting on a rebound.
Short-term speculators amplified the chaos, with leveraged plays on platforms like CME futures spilling over into ETF liquidity.
The result? Turnover skyrocketed as shares changed hands multiple times. Unlike calmer periods, where ETF volumes mirror steady inflows, this spike looks like pure adrenaline: traders using the low-fee, regulated structure of products like IBIT (0.25% expense ratio) as a frictionless on-ramp to BTC volatility.
However, the spike in volume in the past two trading days is in stark contrast with ETF inflows. Farside data showed that on Oct. 10, net outflows were just -$5.7 million, while volumes hit $9.67 billion. Net activity remained subdued even on Oct. 13, with volumes at $6.67 billion.
This gap illustrates a key distinction: trading volume gauges gross activity (total shares traded), often inflated by back-and-forth churn during swings, whereas net inflows measure true capital addition after redemptions. In volatile times, the former surges as traders react, but the latter lags unless sentiment shifts durably bullish.
This pattern isn’t new but 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, however, evoke 2022’s macro rout, where BTC volumes spiked 5x without net gains.
By Monday, Oct. 13, as dust settled and BTC rebounded to $115,250 (up 2.3%), volumes eased, suggesting exhaustion. IBIT still dominated at $4.72 billion, but the frenzy waned as markets digested the news.
Outflows jumped to $326.4 million on Oct.13 because the dust had settled, and caution took over. Bitcoin rebounded slightly to $115,250 (up 2.3% from the Oct. 10 close), letting some investors cash out gains.
Weekend crypto liquidations topped $20 billion, fueling broader fear of trade wars and inflation. Institutions de-risked by pulling money out ahead of more headlines, even as trading volume dropped to $6.7 billion. In short, the initial chaos hid balanced flows; the calm after let sellers dominate.
In the coming weeks, persistent tariff rhetoric could sustain elevated volumes, pressuring the $111,000 Bitcoin price at press time. If trade tensions escalate, expect more “flight to volatility” trades, potentially pushing ETF turnover toward $10 billion routinely.
Yet, without corresponding inflows above $750 million daily, sustained price upside may hinge on broader macro relief.
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