Crypto Market Whiplash, ETF Outflows, Crypto Private Crypto Markets Caught in Tariff Crossfire

• Spot crypto ETFs saw outflows of $722M from BTC ETFs and $16M from ETH ETFs
• The SEC approved options trading on spot ether ETFs
• Ripple agreed to acquire prime broker Hidden Road in a $1.25B deal

Crypto market whiplash, BTC ETFs saw outflows, ETH options got SEC nod

Crypto markets mirrored TradFi markets in another volatile week, with the total cryptocurrency market capitalization closing above $2.63 trillion. Bitcoin dominance notably increased, surpassing 62% amid the broader market sell-off. Among major cryptocurrencies, Bitcoin was relatively resilient, declining approximately 3% week over week, while ether experienced a sharper correction, dropping 12.5% during the same period. The crypto markets initially sold off sharply after President Trump signed the reciprocal tariff order, but sentiment improved significantly later in the week. This turnaround followed President Trump's decision to pause reciprocal tariffs for 90 days and lower tariff rates to 10% for countries that opted against retaliation. The policy adjustment sparked a strong rebound, enabling crypto markets (specifically bitcoin) to regain a substantial portion of their earlier losses.

Despite the price rally triggered by the tariff pause announcement, both BTC and ETH spot ETFs continued to see outflows. Over the past 5 trading days, BTC spot ETFs recorded cumulative net outflows totaling $722.1 million, led predominantly by IBIT, while ETH spot ETFs experienced net outflows amounting to $16 million during the same period. This declining demand could be  attributed to a narrowing futures basis and macroeconomic uncertainties stemming from the US-China trade tensions and bond market volatility, prompting macro investors to liquidate assets—including crypto ETFs—in favor of cash. However, despite the recent short-term fund flow activity, the ETF markets continue to expand, highlighted by Anchorage Digital's announcement this week that BlackRock selected Anchorage for digital asset custody services. Additionally, the US Securities and Exchange Commission (SEC) approved options trading on spot ETH ETFs. In an “accelerated approval” filed on Wednesday, the SEC authorized Nasdaq ISE, LLC’s filing to permit options trading for the iShares Ethereum Trust, highlighting further maturation and institutionalization within the crypto asset space.

A recent post on X highlighted discussions between BlackRock representatives and the SEC's Crypto Task Force about potential enhancements to existing cryptocurrency ETFs, particularly focusing on introducing "in-kind" creation and redemption features. Such in-kind mechanisms would allow investors to directly deposit and withdraw BTC from the ETF without needing to convert into traditional fiat currencies. This feature could significantly improve tax efficiency, as it eliminates the need to sell BTC when entering or exiting the ETF. Additionally, holders would benefit from securely holding BTC within insured ETF accounts, although at a small management fee —though fees remain minimal, with some ETFs, such as VanEck’s HODL, charging none at present. Furthermore, enabling direct crypto deposits into ETFs may stimulate growth of on-chain assets and RWA's. Historically, in previous cycles trends show funds first moving into major cryptocurrencies like BTC, before eventually reaching other blockchain assets such as SOL, ETH, and XRP. BlackRock likely views these ETF improvements as a strategic step to attract substantial capital into their crypto-related products and enhance the broader Bitcoin and DeFi ecosystems.

In another recent development, 21Shares submitted an S-1 registration to the US SEC on Wednesday for a spot Dogecoin ETF, announcing an exclusive partnership with the House of Doge to launch ETFs endorsed by the Dogecoin Foundation. This move aligns with a growing trend of firms pursuing altcoin-based ETFs. Earlier this year, Bitwise similarly filed with the SEC for a Dogecoin ETF. However, progress has been cautious, as evidenced by the SEC's recent postponement of decisions regarding proposed ETFs for Litecoin, Dogecoin, Solana, and XRP. Industry experts attribute these delays to the then-pending confirmation of Paul Atkins as SEC Chair. On Wednesday, the US Senate confirmed Atkins—nominated by President Donald Trump—with a 52 to 44 vote. During his confirmation hearing, Atkins emphasized the creation of a comprehensive regulatory framework for digital assets as a "top priority," signaling potential clarity and further institutional engagement in the crypto market.

Tariff mayhem spills beyond the ticker, private crypto firms feel the squeeze

Despite the volatile price swings keeping traders alert, activity on the deal front remains robust. Ripple announced Tuesday its plan to acquire multi-asset prime brokerage firm Hidden Road for $1.25 billion, marking one of the crypto company’s largest acquisitions to date and the second crypto-related deal this year to cross the billion-dollar mark. Prime brokers play a key role for institutional clients, offering services such as trade execution, securities lending, and clearing. Hidden Road currently clears approximately $3 trillion annually across markets and serves over 300 institutional clients. Ripple said the acquisition will enable Hidden Road to scale significantly, leveraging Ripple’s financial backing to potentially become the world’s largest non-bank prime broker. The deal, expected to close in the coming months, will also position Ripple as the only crypto firm to own and operate a global multi-asset prime brokerage. David Schwartz, Ripple’s CTO, highlighted that the integration could bring some of Hidden Road’s activity onto the XRP Ledger — including tokenized collateral and real-world assets (RWAs). Although Ripple has long promoted the XRP Ledger’s potential for asset tokenization, adoption has so far been modest, with just two RWAs currently tracked on the network, totaling around $50 million in value.

Crypto investment firm Galaxy Digital, helmed by billionaire Michael Novogratz, is pressing ahead with plans to go public in the US via a Nasdaq IPO, undeterred by recent market turbulence. The company disclosed that it has secured regulatory approval from the US SEC to shift its corporate domicile from the Cayman Islands to Delaware, clearing a major hurdle for its US listing ambitions. Galaxy has scheduled a shareholder meeting for May 9 to vote on the proposed reorganization. If approved by both shareholders and the Toronto Stock Exchange, where the firm is already listed, Galaxy aims to begin trading on Nasdaq under the ticker symbol GLXY. The move is part of Galaxy’s broader push to gain greater traction in US capital markets. Like many crypto firms, Galaxy faced regulatory challenges during the Biden administration’s tougher stance on the industry, but it’s now joining a wave of companies exploring IPOs or listings in the US as the environment begins to shift.

But while Galaxy is charging forward, others in the crypto IPO pipeline are starting to second guess their timing. Several firms that had been preparing to go public in the US may now delay or shelve their plans, as market volatility intensifies in the wake of President Donald Trump’s new global tariffs. Industry experts warn that launching an IPO during a collapsing market is risky at best, drawing parallels to the 2008 financial crisis. Tech firms like Klarna have already pulled back, and crypto companies — which rarely go public to begin with — face even steeper challenges. Circle recently filed a Form S-1 with the SEC and signaled IPO intent, but rumors suggest it may now be reconsidering. Investor appetite is drying up in today’s deflationary, uncertain environment, making crypto equities particularly unattractive. Rising interest rates, reluctant underwriters, and cautious VC backers are further cooling enthusiasm. The likelihood of Circle’s IPO happening this year dipped from 96% to 74% on Polymarket following Trump’s tariff announcement, before rebounding to 85% after news of a tariff pause.

Macro pulse 

Among the TradFi assets, US equities declined 3.8% week over week, while oil futures saw a sharp 12.2% drop. Stocks took a steep hit early in the week amid tariff fears, but staged a dramatic rebound on Wednesday after President Trump announced a 90-day pause on reciprocal tariffs for 75 countries that initiated talks with the US. Their tariff rates were reset to a baseline 10%, allowing time for negotiation. However, tensions with China escalated as Trump revealed plans to hike tariffs on Chinese goods to 125%, up from 84%, in response to China raising its own tariffs to 84%, from 34%. Elsewhere, the US Dollar Index slipped 0.9%, 10-year US Treasury yields rose by 20 bps, and the Gold & Silver index dropped 3.9% on the week.

^{*Note: Weekly (7 calendar day) performance figures are as of 8am SGT on April 10, 2025} 

^{DISCLAIMER: The views and opinions expressed herein are those of the author(s) and do not necessarily reflect the views of Talos Global, Inc. or its affiliates (collectively, "Talos") and summarizes information and articles with respect to cryptocurrencies or related topics. This material is for informational purposes only and is only intended for sophisticated institutional investors, and is not (i) an offer, or solicitation of an offer, to invest in, or to buy or sell, any interests or shares, or to participate in any investment or trading strategy, (ii) intended to provide accounting, legal, or tax advice, or investment recommendations, or (iii) an official statement of Talos. No representation or warranty is made, expressed or implied, with respect to the accuracy or completeness of the information or to the future performance of any digital asset, financial instrument or other market or economic measure. The information is believed to be current as of the date indicated and may not be updated or otherwise revised to reflect information that subsequently became available or a change in circumstances after the date of publication. Talos and its employees do not make any representation or warranty, expressed or implied, as to accuracy or completeness of the information or any other information transmitted or made available. Investing in cryptocurrency comes with risk. Certain statements in this document provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Prior results that are presented here are not guaranteed and prior results do not guarantee future performance. Recipients should consult their advisors before making any investment decision. Talos may have financial interests in, or relationships with, some of the assets, entities and/or publications discussed or otherwise referenced in the materials. Certain links that may be provided in the materials are provided for convenience and do not imply Talos's endorsement, or approval of any third-party websites or their content. Any use, review, retransmission, distribution, or reproduction of these materials, in whole or in part, is strictly prohibited in any form without the express written approval of Talos.}