Bitcoin ETFs See $800 Million in April Outflows as Institutions Favor Treasury Bills Over Crypto

Institutional investors are pulling back from Bitcoin exposure in April 2025, with U.S.-listed spot Bitcoin exchange-traded funds (ETFs) witnessing a sharp outflow of over $800 million. This marks one of the highest monthly withdrawals on record for these funds and signals a continued preference among large-scale investors for low-risk assets like U.S. Treasury bills amid growing market volatility and economic uncertainty.

Despite ongoing social media campaigns encouraging retail investors to “buy the dip” in Bitcoin, institutional behavior suggests a very different sentiment. Instead of increasing their exposure to cryptocurrencies, major financial players are doubling down on traditional safe-haven assets—primarily short-term U.S. government debt.

What to Know

• Over $800 million has been withdrawn from U.S.-listed spot Bitcoin ETFs in April 2025, making it the second-largest monthly outflow in history.
• Institutional investors are showing strong demand for U.S. Treasury bills, particularly the three- and six-month durations.
• Macroeconomic conditions—rising recession risks, trade tensions, and weaker corporate guidance—are driving investors toward safer, more liquid instruments.
• Market volatility tied to geopolitical tensions and fiscal policies is discouraging long-term crypto investments by large institutions.

Bitcoin ETF Outflows Reflect Institutional Uncertainty

Spot Bitcoin ETFs have been viewed as a proxy for institutional interest in the digital asset space. These products allow investors to gain exposure to Bitcoin without holding the asset directly. When these ETFs see large inflows, it’s typically viewed as a sign of institutional bullishness. Conversely, significant outflows, like those seen this month, highlight a wave of risk-off behavior.

According to data from SoSoValue, April’s $800 million in outflows follows $767 million in March and a record-breaking $3.56 billion in February. The trend points to sustained caution among professional investors, who appear to be adjusting their portfolios in response to mounting economic headwinds.

Treasury Bills See Soaring Demand from Institutions

While Bitcoin ETFs are shedding assets, the opposite is happening in the U.S. Treasury market. On Monday, the U.S. Treasury auctioned $80 billion in three-month bills at an interest rate of 4.225%, a rise from the previous 4.175%. Simultaneously, $68 billion in six-month bills were sold at an improved interest rate of 4.06%.

More telling than the yields themselves are the bid-to-cover ratios, which offer insight into demand. The three-month bills attracted a bid-to-cover ratio of 2.96, meaning nearly three times more bids were submitted than were accepted. The six-month bills saw a ratio of 2.90, also a notable increase from prior auctions.

This robust demand suggests that institutions still view U.S. debt as a stable and attractive parking spot for capital, particularly during turbulent times. Treasury bills remain a cornerstone of short-term liquidity management due to their low-risk profile and high liquidity.

Why Institutions Are Choosing Bonds Over Bitcoin

There are multiple reasons why institutional investors are leaning away from cryptocurrencies in favor of bonds:

Recession Fears Are Mounting

Recession odds in the United States have surpassed 50% on major betting platforms. The prospect of a slowing economy makes institutions more cautious, especially when it comes to high-risk or speculative assets like Bitcoin. In times of economic downturn, preserving capital becomes more important than chasing yield.

Tariff Volatility and Trade Wars

Ongoing trade disputes, including new tariffs imposed by former President Donald Trump’s administration on China and other trading partners, have injected additional uncertainty into the market. These geopolitical tensions can lead to inflationary pressure, supply chain disruptions, and unpredictable economic outcomes—all of which spook investors.

Corporate Earnings Guidance Takes a Hit

Another key signal of market instability is the drop in corporate earnings guidance. According to recent analysis, Bank of America’s three-month guidance ratio has plummeted to 0.4x, its lowest point since April 2020. This figure is well below the historical average of 0.8x and implies that significantly more companies are issuing guidance below expectations than those forecasting outperformance.

Without strong earnings forecasts, stock market confidence can falter. This lack of clarity ripples into broader asset markets, including cryptocurrencies, which often move in tandem with tech and growth equities.

Preference for Liquidity and Flexibility

In volatile environments, institutions prioritize flexibility. Treasury bills are short-term instruments that allow investors to stay liquid and rotate capital quickly when market conditions change. Bitcoin, while highly liquid in retail markets, lacks the institutional support infrastructure that traditional instruments like bonds enjoy—particularly in terms of collateralization, risk modeling, and regulatory clarity.

Repo market operations also make T-bills especially valuable. These instruments are often used as collateral for short-term borrowing in repurchase agreements, a major advantage that crypto assets currently cannot offer at scale.

Social Media Optimism vs. Institutional Realism

While crypto influencers continue to promote the idea that digital assets are the future of finance and a hedge against inflation, the reality on Wall Street tells a more cautious story. Popular online narratives like “sell bonds, buy Bitcoin” may resonate with retail investors, but institutions are sticking to strategies backed by historical reliability and capital preservation.

This divergence between retail enthusiasm and institutional caution could continue unless macroeconomic indicators shift toward more favorable conditions for risk-taking.

The Outlook for Bitcoin ETFs and Institutional Adoption

The sharp decline in ETF inflows doesn’t necessarily spell the end for institutional Bitcoin adoption—but it does highlight the challenges that lie ahead. Until there is more certainty regarding the economy, interest rates, and global trade relations, many institutions may choose to wait on the sidelines.

Bitcoin ETFs remain a valuable tool for long-term exposure, and should macro conditions stabilize, we could see a resurgence in demand. For now, however, the data is clear: traditional financial instruments are winning the trust of the world’s largest investors.