Bitcoin ETFs saw an increase in trading activity on Friday and Monday, with combined volumes reaching $9.7 billion and $6.7 billion as tariff headlines shook risk-on markets.
BlackRock’s IBIT alone transacted more than $6.9 billion on October 10 (its second highest day on record), as investors repositioned based on the day’s price volatility.
Bitcoin ETF Volume Increases
This dramatic increase in trading volume, far surpassing the usual daily averages of $2 billion to $3 billion, signals a buying and selling frenzy rather than simple accumulation.
Spot Bitcoin ETFs have become a go-to vehicle for institutional and retail investors seeking exposure to BTC without the hassle of direct custody. But why this explosion now? The culprit lies in a perfect storm of macroeconomic shocks, particularly escalating tariff threats from U.S. policymakers.
On October 10, headlines about possible 60% tariffs on Chinese imports sent shockwaves through global risk assets, amplifying fears of trade wars and inflation spikes.
Being a hedge against fiat depreciation and a high-beta risk asset, Bitcoin plunged nearly 18% intraday from $122,600 to $102,546, its biggest drop in months.
This volatility has created some interesting opportunities (and necessities) for trading. Investors rushed to ETFs to execute quick trades: Long-term fund holders reduced their positions to lock in gains from BTC’s summer rally above $125,000, while opportunistic traders rallied to the downside, betting on a rebound.
Short-term speculators have amplified the chaos, with leveraged plays on platforms such as CME futures impacting ETF liquidity.
The result? Turnover skyrocketed as shares changed hands repeatedly. Unlike quieter periods, where ETF volumes reflect steady inflows, this spike feels like pure adrenaline: traders are using the regulated, low-fee structure of products like IBIT (0.25% expense ratio) as a frictionless on-ramp to BTC’s volatility.
However, the surge in volumes over the past two trading days stands in stark contrast to ETF inflows. Hidden side data showed that as of October 10, net outflows were only -$5.7 million, while volumes reached $9.67 billion. Net activity remained subdued even on October 13, with volumes of $6.67 billion.
This gap illustrates a key distinction: Trading volume measures gross activity (total shares traded), often inflated by back-and-forths during swings, while net inflows measure the true capital addition after buybacks. In times of volatility, the former increases as traders react, but the latter lags unless sentiment becomes sustainably bullish.
This trend is not new but has intensified after the ETF’s launch.
During the March 2025 rally, volumes and inflows synchronized between $15 billion and $20 billion per day, fueled by new allocations from pension funds. Tariff fears, however, point to the macro rout of 2022, where BTC volumes increased 5x with no net gains.
On Monday, October 13, as the dust settled and BTC rebounded to $115,250 (up 2.3%), volumes subsided, suggesting exhaustion. IBIT still dominates at $4.72 billion, but the frenzy subsided as markets digested the news.
Capital outflows soared to $326.4 million on October 13 because the dust had settled and caution took over. Bitcoin rebounded slightly to $115,250 (up 2.3% from the October 10 close), allowing some investors to cash out their gains.
Crypto liquidations over the weekend topped $20 billion, fueling broader fears of trade wars and inflation. Institutions reduced their risks by withdrawing money before hitting the headlines, even as trading volume fell to $6.7 billion. In short, the initial chaos hid balanced flows; the calm afterwards let the sellers dominate.
In the coming weeks, continued tariff rhetoric could keep volumes high, putting pressure on the Bitcoin price from $111,000 at press time. If trade tensions escalate, expect more flight-to-volatility trades, which could potentially push ETF turnover toward $10 billion on a regular basis.
Yet without corresponding inflows above $750 million per day, a sustained rise in prices could depend on broader macroeconomic relief.
