Crypto Bloodbath: ETF Outflows Spark 5% Market Plunge as Traders Flee Risk

Crypto Market Extends Weekly Losses as ETF Outflows and U.S.–China Tensions Fuel Volatility

The global cryptocurrency market witnessed another wave of turbulence this week, with prices tumbling sharply amid renewed geopolitical fears and record outflows from Bitcoin exchange-traded funds (ETFs). According to data from CoinMarketCap, the overall crypto market capitalization slid by 5.12% in the past 24 hours, extending its weekly losses to nearly 13.8%.

Analysts say the decline reflects growing investor anxiety over mounting U.S.–China trade tensions, weakening risk sentiment in global markets, and a significant pullback in institutional crypto exposure.

ETF Outflows and Geopolitical Tensions Trigger Market Panic

The latest market downturn coincides with escalating trade tensions between the United States and China, reigniting fears of a global slowdown. Investors are now bracing for the possibility of a renewed tariff war after Washington hinted at tightening restrictions on Chinese tech imports.

This geopolitical backdrop has prompted a flight from risk assets, including equities and cryptocurrencies. The NASDAQ-100 ETF (QQQ) — heavily weighted in technology stocks — recorded a sharp rise in correlation with Bitcoin, reaching +0.91, a signal that digital assets are once again moving in tandem with traditional markets.

At the same time, data from BitMEX and CryptoQuant show that Bitcoin ETFs saw $536 million in outflows in a single day, the largest withdrawal since August. The move highlights waning institutional appetite and a preference for safer assets amid uncertain conditions.

“The scale of ETF outflows is a warning sign,” said Marcus Lin, senior analyst at Glassnode. “Institutional players are stepping back, and that’s pressuring short-term liquidity in both Bitcoin and altcoins.”

Liquidations Rock the Derivatives Market

Volatility in the derivatives market has amplified the pain for traders. Funding rates for perpetual futures surged by 128%, forcing a wave of liquidations among over-leveraged positions. Within hours, more than $500 million in open interest was wiped out across major exchanges, including Binance, OKX, and Bybit.

Bitcoin (BTC) plunged nearly 4% on the day, dropping below $105,000 before stabilizing slightly above the $106,000 mark. Ethereum (ETH) was hit harder, falling 6% and sliding below the critical $4,000 level.

Other major cryptocurrencies followed suit:

• BNB dropped 5.3% to $550

• Solana (SOL) slipped 6.2% to $175

• Cardano (ADA) lost 4.8%, hovering around $0.45

Analysts note that the sell-off was exacerbated by cascading margin calls and algorithmic liquidations. “Once BTC broke key support levels, the rest of the market followed. The lack of institutional bids intensified the downward move,” said trader Jonathan Meyers of Delphi Digital.

ETF Filings Continue Despite U.S. Government Shutdown

Even as the U.S. government faces a partial shutdown, crypto firms are racing to file new ETF applications with the Securities and Exchange Commission (SEC). In the past week alone, at least five new filings were submitted, underscoring the industry’s determination to expand access to regulated digital asset investment products.

Among the most notable is VanEck’s proposal for a Lido Staked Ethereum ETF, which would offer exposure to stETH — the tokenized version of staked Ether used on Lido Finance. The fund aims to allow investors to earn staking rewards without the technical burden of managing validator nodes.

Meanwhile, 21Shares, one of Europe’s largest crypto product issuers, has applied to launch a 2x leveraged ETF tracking Hyperliquid’s native token (HYPE). The product would provide investors with double the daily returns of the decentralized exchange’s performance index — a bold move that could bring leveraged DeFi exposure to mainstream markets.

Market observers have dubbed this wave of filings “ETFoxtober”, reflecting the rush of asset managers hoping to secure SEC approval before the end of the quarter. However, approval remains uncertain amid growing regulatory scrutiny and the ongoing government shutdown.

Crypto Executives Join Trump at Exclusive White House Fundraiser

In a surprising political turn, U.S. President Donald Trump hosted a high-profile fundraising dinner at the White House this week, reportedly attended by some of the most influential figures in the cryptocurrency industry.

The $250 million event, part of a campaign to expand White House facilities, drew major crypto executives, including Cameron and Tyler Winklevoss of Gemini, along with representatives from Coinbase and Ripple Labs, according to reports from The Wall Street Journal.

The dinner coincided with the 15th day of the U.S. government shutdown, raising questions about the timing and optics of such a lavish gathering. Tech and defense industry leaders from companies such as Meta, Amazon, Google, Lockheed Martin, and Microsoft were also present.

Also in attendance was Kelly Loeffler, the former CEO of Bakkt and current head of the Small Business Administration. The administration declined to disclose donation figures or respond to inquiries about the event’s sponsors.

Political analysts note that the increasing presence of crypto leaders at political events underscores how digital finance has become an unavoidable part of Washington’s economic agenda.

Trump Family’s Expanding Crypto Empire Surpasses $1 Billion

Adding to the intrigue, a Financial Times investigation revealed that the Trump family’s crypto ventures have generated more than $1 billion in pre-tax earnings over the past year.

At the center of this development is World Liberty Financial (WLF) — a blockchain-based financial platform reportedly co-founded by Donald Trump and managed by his sons, Donald Jr. and Eric Trump. The project has launched several digital tokens and stablecoins, attracting billions in private investment.

In a disclosure earlier this year, Trump reported $57.4 million in income from his involvement in WLF. As of last month, the family’s collective holdings were valued at approximately $5 billion, boosted by the unlocking of a major token tranche.

In addition to WLF, the family has profited heavily from trading and selling memecoins such as TRUMP and MELANIA, both of which have seen dramatic price surges. Eric Trump told reporters that the family’s actual income from digital assets “could be even higher” than publicly reported.

The Trumps’ growing influence in the blockchain space reflects a broader shift among U.S. political and business elites toward embracing digital finance as part of their investment portfolios.

Market Outlook: What’s Next for Crypto Investors?

With the crypto market caught between macroeconomic uncertainty, regulatory shifts, and political headlines, analysts expect volatility to remain high in the weeks ahead.

Bitcoin’s ability to hold above $100,000 remains a key technical threshold, while Ethereum’s rebound above $4,000 could help restore market confidence. However, persistent ETF outflows and tightening global liquidity suggest that investors should remain cautious.

“Crypto markets are transitioning from a liquidity-driven rally to a reality check,” said economist Rachel Tan of Chainalysis. “The coming months will test whether institutional interest can withstand macro headwinds.”

Despite short-term turbulence, long-term fundamentals remain intact. The continued development of blockchain ETFs, increasing corporate treasury allocations to assets like Solana, and growing political attention signal that digital assets are evolving from speculative instruments to legitimate components of global finance.

Conclusion

The convergence of ETF outflows, geopolitical tensions, and political developments has made October one of the most volatile months for crypto in 2025. While the current correction may unsettle investors, it also highlights how deeply digital assets have become intertwined with global economics, regulation, and even politics.

As the market recalibrates, one thing is certain — crypto’s role in shaping the future of finance is only getting stronger.

Source: News

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