Bitcoin (BTC) spot exchange-traded funds (ETFs) faced significant pressure amid uncertainty caused by the ongoing global trade war. Between March 28 and April 8, these ETFs experienced net outflows totaling $595 million, according to Farside Investors data. Notably, even after most US import tariffs were temporarily lifted on April 9, the funds still recorded an additional $127 million in net outflows.

This situation has left traders questioning the reasons behind the continued outflows and why Bitcoin’s rally to $82,000 on April 9 failed to boost confidence among ETF investors.

Spot Bitcoin ETF net flows. Source: Farside Investors

Corporate credit risk could be driving investors away from BTC

One factor contributing to diminished interest is the rising likelihood of an economic recession. “What you can clearly observe is that liquidity on the credit side has dried up,” Lazard Asset Management global fixed income co-head Michael Weidner told Reuters. Essentially, investors are shifting toward safer assets like government bonds and cash holdings, a trend that could ultimately lead to a credit crunch.

A credit crunch is a sharp decline in loan availability, leading to reduced business investment and consumer spending. It can happen regardless of US Treasury yields because heightened borrower risk perceptions may independently restrict credit supply.

RW Baird strategist Ross Mayfield noted that even if the US Federal Reserve decides to cut interest rates in an effort to stabilize turbulent markets, any relief for companies might be short-lived.

Mayfield reportedly stated: “In a stagflationary environment from tariffs, you’ll see both investment grade and high yield corporate borrowers struggle as their costs of debt rise.” Despite the 10-year US Treasury yield remaining flat compared to the previous month, investor appetite for corporate debt remains weak.

ICE Bank of America Corporate Index option-adjusted spread. Source: TradingView / Cointelegraph

Dan Krieter, director of fixed income strategy at BMO Capital Markets, told Reuters that corporate bond spreads have experienced their largest one-week widening since the regional banking crisis in March 2023. Corporate bond spreads measure the difference in interest rates between corporate bonds and government bonds, reflecting the additional risk investors take when lending to companies.

Related: Bitwise doubles down on $200K Bitcoin price prediction amid trade tension

Trade war takes center stage, limiting investor interest in BTC

Investors remain concerned that even if the US Federal Reserve cuts interest rates, it may not be enough to restore confidence in the economy. This sentiment also explains why the US Consumer Price Index (CPI) for March—at 2.8%, its slowest annual increase in four years—failed to positively impact stock markets. “This is the last clean print we’re going to see before we get those tariff-induced inflation increases,” Joe Brusuelas, RSM chief economist, told Yahoo Finance.

Traders appear to be waiting for stabilization in the corporate bond market before regaining confidence in Bitcoin ETF inflows. As long as recession risks remain elevated, investors will likely favor safer assets such as government bonds and cash holdings. Breaking this correlation would require a shift in perception toward Bitcoin’s fixed monetary policy and censorship resistance. However, potential catalysts for such a change remain unclear and could take months or even years.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ether exchange-traded funds (ETFs) in the United States may be able to start staking a portion of their tokens as soon as May, according to Bloomberg Intelligence analyst James Seyffart. 

On April 9, the US Securities and Exchange Commission (SEC) authorized exchanges to begin listing options contracts tied to spot Ether (ETH) ETFs after greenlighting Bitcoin (BTC) ETF options in September. However, issuers are still waiting for the regulator to allow Ether ETFs to offer staking after filing numerous requests for permission earlier this year.

Source: James Seyffart

The approval of options contracts could represent a key step toward regulatory approval for staking services in the United States. Bloomberg Intelligence analyst James Seyffart said on April 9 that clearance for staking on ETH funds could come as early as May but would likely take until the end of 2025.

“It’s possible they could be approved for staking early, but the final deadline is at the end of October,” Seyffart said in a post on the X platform. “Potential intermediate deadlines before the final approval (or denial) are in late May & late August.”

Options are financial derivatives that give investors the right, but not the obligation, to buy or sell an asset at a predetermined price before a certain date. Staking, on the other hand, involves locking up a cryptocurrency, like ETH, to support network operations — such as validating transactions — in exchange for rewards.

In ETH funds, options contracts allow investors to hedge or speculate on the tokens’ prices, while staking offers a way to earn rewards by participating in Ethereum’s proof-of-stake network.

Ether ETF inflows. Source: Farside Investors

Related: SEC approves options on spot Ether ETFs

Progress toward adoption

Ether ETFs launched in June 2024 but struggled to attract significant investor interest. According to data from Farside Investors, the funds have seen net inflows of $2.4 billion as of April 10, compared to $35 billion for Bitcoin ETFs introduced in January. Analysts say the SEC’s approval of Ether ETF options could help spur adoption.

Asset managers are also waiting on the SEC to greenlight requests to allow in-kind creations and redemptions for Bitcoin and Ether ETFs.

The emergence of options markets tied to spot crypto ETFs is a “monumental advancement” in crypto markets and creates “extremely compelling opportunities” for investors,” Jeff Park, Bitwise Invest’s head of alpha strategies, said in a Sept. 20 X post. 

But staking could be the most significant step forward for Ether funds. 

In March, Robbie Mitchnick, BlackRock’s head of digital assets, said Ether ETFs are “less perfect” without staking. “A staking yield is a meaningful part of how you can generate investment return in this space.”

Magazine: Memecoin degeneracy is funding groundbreaking anti-aging research

Users of the Atomic and Exodus wallets are being targeted by threat actors uploading malicious software packages to online coding repositories to steal crypto private keys in the latest cybersecurity threat identified by security professionals. 

According to cybersecurity researchers at ReversingLabs, the exploit works by hiding malicious code in seemingly legitimate npm software packages, which are pre-built bundles of code widely used by software developers.

These malicious software packages target locally installed Atomic Wallet and Exodus Wallet files by installing a patch that overwrites the files to compromise the user interface and fool the unsuspecting victim into sending crypto to scam addresses.

Software supply chain attacks are an emerging threat vector targeting crypto holders as the industry continues to play a cat-and-mouse game with hackers attempting to steal user funds using increasingly sophisticated methods to avoid detection.

The malicious code contained in the pdf-to-office package. Source: ReversingLabs

Related: $2B lost to crypto hacks in Q1 2025, $1.63B from access control flaws

Hackers target crypto community in increasingly sophisticated attacks

According to cybersecurity firm Hacken, crypto hacks and exploits cost the industry roughly $2 billion in losses during Q1 2025, most of which came from the $1.4 billion Bybit hack in February.

The SafeWallet developer released a post-mortem update in March 2025 outlining a forensic analysis of the single biggest hack in crypto history.

SafeWallet’s analysis ultimately found that a Safe developer’s computer was compromised by hackers who hijacked the developer’s Amazon Web Services session tokens to access the firm’s development environment and set up the Bybit attack.

Jameson Lopp, a cypherpunk and chief security officer at Bitcoin (BTC) custody company Casa, recently sounded the alarm on BTC address poisoning attacks.

A breakdown of the losses caused by crypto hacks and exploits in Q1 2025. Source: Hacken

Address poisoning attacks target victims by generating destination addresses that match the first four and the last four characters of an address from the victim’s transaction history.

The threat actor then sends a transaction from the malicious address for a small amount, typically below one dollar, to the target so that the address will show up in a victim’s transaction history.

If the victim is not paying attention by carefully examining the entire address, they may mistakenly send funds to the malicious address, which closely resembles the destination.

Cybersecurity firm Cyvers estimates that address poisoning attacks were responsible for $1.2 million in stolen funds in March 2025 alone.

Magazine: $55M DeFi Saver phish, copy2pwn hijacks your clipboard: Crypto Sec