Bitcoin experienced a decline of almost 3% after a U.S. appeals court temporarily reinstated Trump’s tariffs, reversing a previous trade court ruling that deemed them unconstitutional. U.S. spot Bitcoin ETFs also faced a significant shift, breaking a 10-day streak of inflows with net outflows of $347 million on Thursday, marking the worst performance since March 11. Analysts suggest that this sell-off represents a recalibration by institutions rather than sheer panic, with investors adapting to the challenges posed by policy risks and overarching macroeconomic uncertainties.
On Thursday, Bitcoin dropped nearly 3% as a U.S. appeals court temporarily restored President Trump’s contentious tariffs, mere hours after a trade court deemed them unconstitutional.
According to the U.S. Court of Appeals for the Federal Circuit, “The judgments and the permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed until further notice while this court considers the motions papers,” as indicated in their May 29 ruling.
This stay, which consolidates two ongoing appeals, provides the government with an opportunity to contest the earlier ruling by the U.S. Court of International Trade that invalidated tariffs imposed under the 1977 International Emergency Economic Powers Act.
Trump reacted on Truth Social, stating, “If allowed to stand, this would completely destroy Presidential Power — The Presidency would never be the same,” following the trade court’s decision.
The ongoing legal disputes concerning Trump’s tariffs are creating additional uncertainty in markets that are already wrestling with inflation, interest rate fluctuations, and geopolitical tensions.
Bitcoin slid 2.7% to a day’s low of just under $106,000 but is still up 11.5% for the month, according to CoinGecko. On Myriad, the decentralized prediction market from Decrypt’s parent company DASTAN, sentiment leaned neutral, with 51% forecasting Bitcoin to stay above $106,000 by June 1.
Ethereum (ETH) decreased by 3.8% to $2,621, while Solana (SOL), XRP (XRP), and Binance Coin (BNB) showed comparable declines over the last 24 hours.
Tracy Jin, COO of crypto exchange MEXC, remarked, “This recent court ruling adds another layer of economic uncertainty.”
Jin added that the current softness in crypto isn’t driven by a decrease in demand, but is instead an adjustment to uncertainties—policy risks, geopolitical strain, and disproportionate positioning—reflecting in the downturn across Bitcoin and important altcoins.
Negative Turn for Bitcoin ETF Flows
In conjunction with the appeals court’s actions, U.S. spot Bitcoin ETFs concluded a 10-day inflow streak that accumulated $4.26 billion.
On Thursday, the 11 funds recorded nearly $347 million in net outflows, the worst one-day exit since March 11, as noted by Coinglass data.
Fidelity’s FBTC saw the highest net outflow, totaling $166.3 million, followed by GBTC with $107.5 million and ARKB at $89.2 million.
Jin contended that the substantial Bitcoin ETF outflows should not be viewed as a panic response but rather as an ongoing institutional adjustment.
Only BlackRock’s IBIT recorded inflows on Thursday, adding $125 million to extend its streak to 34 consecutive trading days. IBIT has now attracted nearly $4 billion over the past two weeks, per data from Farside Investors.
Ganesh Mahidhar, an investment professional at Further Ventures, pointed out, “It’s essential to view this dip within the wider economic context,” adding that, “ETF flows primarily stem from retail investors, highlighting the current retail sentiment.”
Mahidhar further noted that policy uncertainties are affecting capital flows into risk assets but expressed that the outlook could change rapidly if clarity is restored.
He anticipates that sentiment will rebound once trade tensions ease, noting that there is hope among firms for a resolution leading to either low or no tariffs, which could inspire a noticeable uptick in asset values in the medium term.
Daily Newsletter
Receive the top news stories every morning, along with original features, a podcast, videos, and more.
