Investor sentiment across digital asset markets weakened further on Monday as capital fled from both Bitcoin and Ethereum exchange-traded funds, underscoring how political gridlock and economic uncertainty continue to dampen risk appetite.
According to Farside Investors data, spot Bitcoin ETFs experienced another round of withdrawals worth roughly $40 million, led by significant redemptions from BlackRock’s IBIT fund.
Smaller inflows into Fidelity and Bitwise products barely softened the blow, leaving total assets across Bitcoin ETFs hovering around $150 billion. Ethereum funds mirrored the trend, losing nearly $150 million in a single day as investors scaled back exposure to riskier instruments.
The wave of outflows comes amid intensifying domestic unrest in the U.S., where the ongoing government shutdown – now in its third week – has ignited widespread “No Kings” protests.
Demonstrators filled streets from New York to Los Angeles, denouncing what they see as the Trump administration’s growing concentration of power. Analysts warn that such political disarray risks eroding institutional trust, which could spill over into liquidity concerns for financial markets.
Bitunix analysts called the moment a “stress test for U.S. credibility,” noting that continued polarization could shake investor confidence even in traditionally resilient sectors. They cautioned that any prolonged deadlock in Washington may weigh on market structure and deepen the retreat from speculative assets.
Kronos Research’s chief investment officer Vincent Liu added that the ETF outflows signal a broader shift toward defensive positioning. “Investors are locking in profits and retreating to the sidelines until policy stability returns,” Liu said, adding that clearer macro direction or easing political tension could help restore confidence and renew inflows into Bitcoin and Ethereum products.
