ETFs Keep Draining While Traders Keep Pretending the Bull Never Left 🐂

Spot Bitcoin exchange-traded funds recorded about $1.72 billion in net outflows in the week ending June 5, extending their redemption streak to four straight weeks of billion-dollar withdrawals dating back to the week ending May 15, according to SoSoValue data. Data compiled by Farside Investors shows the pressure was concentrated in the first three trading days of June, when the funds shed $483.8 million, $519.1 million and $396.6 million, respectively. The ETFs briefly reversed into a $3.2 million inflow on Thursday before Friday brought another $325.7 million in outflows, and the selling extended into the following week with $91.4 million in withdrawals on June 8, including $232.9 million from BlackRock's iShares Bitcoin Trust ETF (IBIT) alone. BlackRock's IBIT accounted for the bulk of the week's redemptions with about $1.34 billion in net outflows, while the Fidelity Wise Origin Bitcoin Fund (FBTC) lost $201.9 million and the Grayscale Bitcoin Trust ETF (GBTC) recorded $144.3 million in net outflows. Morgan Stanley's MSBT, a newer entrant to the market, took in $35.1 million in inflows, while several other issuers posted zero flows. Since May 10, total net assets across the spot Bitcoin ETF complex have declined by roughly $33 billion, from $109 billion to $77 billion, in line with Bitcoin's 27% drop from its May 10 peak of $81,443 to lows of $59,353. The asset has since traded near $62,639.14 to $62,854.91, more than 50% below its all-time high of nearly $125,000 reached last October.

Analysts offered competing explanations for the sustained redemptions. Matthew Pinnock, chief operating officer of Altura DeFi, said the ETF outflows reflect a "macro-driven repricing of risk" rather than a Bitcoin-specific concern, noting that IBIT bore the brunt because of its scale, liquidity and role as a preferred institutional access vehicle. "The timing of these redemptions aligns closely with stronger-than-expected US employment data, rising Treasury yields, and a sharp reduction in rate cut expectations this year amid the ongoing Gulf conflict," Pinnock told Cointelegraph, adding that "Bitcoin's recent weakness has been driven more by changing rate expectations and institutional risk appetite than by crypto-specific developments." Fabian Dori, chief investment officer at Swiss digital asset bank Sygnum, argued that the outflows are real but are not supported by on-chain and market data as evidence of investors rotating into anticipated IPOs such as SpaceX. "The ETF outflows are real. But the data does not truly support the hypothesis that bitcoin would be bleeding because of the SpaceX IPO," Dori said in an interview with CoinDesk, pointing to broadly normal exchange flows, little contraction in stablecoin supply, continued inflows into higher-risk crypto products and a decline in CME bitcoin futures open interest that has coincided with ETF redemptions. Adam Haeems, head of asset management at Tesseract Group, told Decrypt that the pace of ETF outflows has "moderated materially" and described the pressure as "exhausting rather than building." According to Haeems, three forces are driving the streak: leveraged funds redeeming shares after arbitraging spot ETFs against futures, a long migration out of the highest-fee fund among U.S. spot products, which has now surrendered nearly $27 billion since launch, and capital rotating toward AI equities and upcoming tech IPOs. "The first two are mechanical and self-limiting. The third is the one we watch, because it is about risk appetite rather than market structure," he said, noting that "several other funds took net inflows on Monday even while the headline stayed negative, which tells you the selling is concentrated rather than general."

The macro backdrop has done little to help. The U.S. Bureau of Labor Statistics reported on Wednesday that the Consumer Price Index rose 4.2% in May from a year earlier, the fastest annual pace in three years and in line with economist expectations, bringing the annual inflation rate up from 3.8%. The Federal Reserve has kept its interest rate unchanged between 3.50% and 3.75% for six months, and the U.S.-Israel war with Iran has entered its 103rd day, driving oil prices higher and adding to energy-price volatility. Robin Singh, CEO of Koinly, told Decrypt that "while the higher-than-expected CPI reading is not ideal for risk assets such as Bitcoin, I don't believe it significantly changes the market outlook," adding that for ETF outflows to dry up, "we need to see spot demand pick up and Bitcoin reclaim well into the $70,000s range." Once Bitcoin starts showing sustained strength and attracting attention again, "ETF flows are likely to follow," he said.

Spot Ether ETFs also recorded four straight weeks of redemptions, shedding $173.05 million in the week ending June 5 after outflows of $241.45 million the prior week, $215.99 million the week before that and $255.11 million in the week before that, for a four-week total of about $885.6 million, though the products returned to inflows totaling $82.4 million as of June 8. Other altcoin ETF products told a different story: HYPE ETFs recorded $16.65 million in net inflows in the week ending June 5, XRP ETFs drew $2.62 million in modest inflows and Solana ETFs posted $6.52 million in outflows, with the Solana and XRP products each having recorded a single day of outflows on June 3 of $12.8 million and $5.34 million, respectively.