Institutional investors are exiting Bitcoin as US-listed spot Bitcoin exchange-traded funds (ETFs) see over US$800 million in April outflows to date. The mass exit, fuelled by intensifying economic uncertainty and trade volatility, is potentially the second-biggest monthly ETF outflow ever, after the US$3.56 billion flight in February.
Despite a flurry of X (formerly known as Twitter) and Facebook posts calling on investors to ‘sell bonds, buy bitcoin,’ the numbers tell a starkly contrasting story. Institution investors are opting for safety over speculation, putting capital into short-term US Treasury bills rather than digital currency.
Treasury bill demand remains on the increase. On Monday, the US Treasury auctioned US$80 billion worth of three-month T-bills at a 4.225% interest rate, higher than the last 4.175%. The bid-to-cover ratio jumped to 2.96. Thus, reflecting high demand from institutional investors looking for liquidity and stability in the face of market volatility.
Likewise, US$68 billion worth of six-month bills were offered at 4.06% with a bit higher bid-to-cover ratio of 2.90. Such short-term debt instruments are extremely liquid and often used in repo markets so investors can keep financial flexibility without being locked into long-term risk assets such as Bitcoin.
Trade tensions and Recession fears Institutional caution is being driven by a surge of economic uncertainty. President Donald Trump's deepened trade war tensions with China and other important partners have added to fears across financial markets.
Corporate earnings weakened in 2025 and forecasts suggest similar pattern to follow for the rest of the year. Bank of America's 3-month guidance ratio has fallen to 0.4x, its lowest level since April 2020, thereby, indicating widespread corporate pessimism.
Adding further pressure on risk sentiment, betting markets now place more than a 50% chance of a US recession. Meanwhile, increasing Japanese bond yields are complicating global capital allocation further, further deterring risk-on strategies.
So far during April, the 11 spot Bitcoin ETFs listed in the US lost over US$800 million, as per SoSoValue. This is a follow-up downtrend from March's US$767 million pullout. Institutional investors seem not to be swayed by Bitcoin's greater attractiveness and retail investors' continued fervor, deferring to capital preservation at the expense of elevated-volatility asset exposure.
As crypto influencers keep on portraying Bitcoin as a fiat instability hedge, institutions are concentrating on managing rate fluctuations, yield volatility, and geopolitical risk. Thus, leaning into assets that provide predictability and liquidity.
The April 2025 figures highlight a widening gap between retail storytelling and institutional action. With economic indicators flashing red and uncertainty over global trade increasing, old safe havens such as US Treasury bills are taking back center stage. At least for the moment, the ‘buy Bitcoin’ refrain is being met with a resounding preference for bonds.