On Friday and Monday, Bitcoin ETFs experienced significant trading activity, with total volumes reaching $9.7 billion and $6.7 billion, driven by tariff-related concerns in the markets.
On October 10, BlackRock’s IBIT recorded over $6.9 billion in volume, marking its second-highest trading day ever, as traders adjusted their positions amidst price volatility.
Surge in Bitcoin ETF Volume
The substantial increase in trading volume, which far exceeded the normal daily average of $2-3 billion, indicates a flurry of trading activity rather than simple accumulation.
Spot Bitcoin ETFs have emerged as an appealing choice for both institutional and retail investors seeking BTC exposure without the hassle of direct custody. But what triggered this rapid growth? The answer lies in a combination of macroeconomic shocks, particularly rising tariff threats from U.S. policymakers.
On October 10, prospects of imposing 60% tariffs on Chinese imports sent shockwaves through global risk markets, amplifying fears of trade wars and potential inflation spikes.
As a hedge against fiat devaluation and a highly volatile asset, Bitcoin fell nearly 18% intraday from $122,600 to $102,546, marking its most significant drop in several months.
This volatility opened up promising (and urgent) trading opportunities. Investors quickly turned to ETFs for swift trading: long-term holders adjusted their positions to realize profits from Bitcoin’s summer surge above $125,000, while opportunistic traders capitalized on the dip, betting on a recovery.
Short-term speculators exacerbated the situation, with leveraged trades on platforms like CME futures affecting ETF liquidity.
The outcome? Trading turnover skyrocketed as shares exchanged hands multiple times. In contrast to calmer times, where ETF volumes align with steady inflows, this surge appears driven purely by adrenaline: traders leveraged the low-fee and regulated nature of products like IBIT (0.25% expense ratio) as a seamless route to Bitcoin volatility.
However, the increase in volume over the past two trading days sharply contrasts with ETF inflows. Farside data indicated that on October 10, net outflows were merely -$5.7 million, while volumes reached $9.67 billion. Even on October 13, net activity remained low, with volumes at $6.67 billion.
This disparity underscores a crucial difference: trading volume reflects total trading activity (shares exchanged), often inflated by back-and-forth trading during market swings, while net inflows indicate genuine capital influx after redemptions. During volatile periods, the former tends to surge, while the latter lags unless there is a sustained bullish sentiment.
This trend isn’t new but has intensified after the ETF launch.
During the bull run in March 2025, trading volumes and inflows aligned at $15-20 billion days, driven largely by pension fund allocations. However, concerns over tariffs echo the macro downturn of 2022, where Bitcoin volumes surged fivefold with no net gains.
By Monday, October 13, as the dust settled and Bitcoin rebounded to $115,250 (up 2.3%), trading volumes decreased, suggesting a cooling off. IBIT remained dominant at $4.72 billion, but the excitement dwindled as markets processed the news.
Outflows surged to $326.4 million on October 13 as the situation stabilized and caution set in. Bitcoin slightly rebounded to $115,250 (up 2.3% from the close on October 10), allowing some investors to realize their profits.
Weekend liquidations in the crypto market topped $20 billion, further amplifying concerns about trade wars and inflation. Institutions reduced exposure by withdrawing funds ahead of further developments, even as trading volumes dipped to $6.7 billion. In essence, the earlier chaos concealed balanced flows; the subsequent calm allowed sellers to dominate.
In the upcoming weeks, continued tariff discussions might maintain elevated volumes, putting pressure on Bitcoin’s current price of $111,000. Should trade tensions escalate, expect more “flight to volatility” trading patterns, potentially pushing ETF turnover consistently toward $10 billion.
Yet, without sustained inflows exceeding $750 million daily, persistent price growth may depend on broader macroeconomic stabilization.
