$2.1 billion in outflows: Bitcoin ETFs worry the crypto market

The institutional investment barometer remains red. As bitcoin seeks to stabilize after many weeks of turbulence, US spot Bitcoin ETFs are facing a new wave of large withdrawals. Since the beginning of June, these investment vehicles have lost more than $2.1 billion, a sign that fuels questions about investors' appetite for the world's leading crypto.

Bitcoin ETFs suffer new wave of withdrawals

Spot Bitcoin ETFs listed in the United States are experiencing one of the most difficult phases since their creation. These products have in fact seen more than $2.1 billion in net outflows since the beginning of June. The June 11 session resulted in an additional withdrawal of $214 million.

This trend follows that seen in May, where $2.4 billion had already been withdrawn from Bitcoin ETFs. In the preceding days, the market had experienced a series of thirteen consecutive outflow sessions leading to nearly $4.4 billion in withdrawals before a brief return to positive flows on June 4.

The main figures to remember are:

• $2.1 billion in net outflows since the start of June;
• 214 million dollars withdrawn during the session on June 11;
• 4.4 billion dollars in outflows recorded during a series of thirteen consecutive sessions;
• $33 billion in assets wiped from spot Bitcoin ETFs since May 10;
• A 27% drop in bitcoin from its peak at $81,443 to its low at $59,353.

The contraction in outstandings is just as spectacular. Net assets of spot Bitcoin ETFs fell from $109 billion on May 10 to $77 billion today. This $33 billion drop occurred in parallel with the bitcoin correction.

The pressure remains strong, but according to Adam Haeems, investment director of the Tesseract group, the intensity of the selling dynamic seems to be weakening. He declared that “the selling pressure has not yet really stabilized, but it seems to be running out of steam rather than intensifying”. This analysis indicates that the exit movement could gradually run out of steam.

Capital turnover redraws investor priorities

The withdrawals observed for several weeks can be explained, according to Adam Haeems, mainly by specific market mechanisms. The unwinding of arbitrage setups between spot ETFs and futures and a ” leak “ capital outside the most expensive Bitcoin spot fund in the United States are notably cited as explanations. This product has lost around $27 billion since it began marketing, meaning that investors are looking to reduce certain exposure costs.

The expert also highlights a more structural evolution in investor preferences. Part of the capital would today leave the Bitcoin ecosystem to head towards stocks linked to artificial intelligence as well as future IPOs in the technology sector.

Haeems summarizes this difference by saying: “the first two factors are mechanical and naturally limited in time. The third is the one we monitor closely, as it reflects investors' risk appetite more than market structure.. In other words, the first two factors could disappear on their own over time, while competition from other asset classes depends more on general investor moods.

Inflation, Fed and geopolitics: markets seek a new catalyst

The movements observed on Bitcoin ETFs are taking place in a particularly busy macroeconomic environment. The war between the United States, Israel and Iran enters its 103^th day, which fuels tensions on energy markets. At the same time, US inflation rebounded to 4.2% in May from 3.8% previously. The Federal Reserve's key rates remain unchanged in a range of 3.50% to 3.75% for six months.

Analysts disagree on what could revive flows into Bitcoin ETFs in this context. According to Robin Singh, the managing director of Koinly, the market could recover thanks to the recovery of bitcoin itself. “Even though the Consumer Price Index (CPI) was higher than expected, which is not positive for risky assets like bitcoin, I don't think it fundamentally changes the market outlook”he explains. He says a sustained return of bitcoin above $70,000 could spark a rebound in institutional investor interest. This is why he adds: “flows into ETFs should follow suit”.

Adam Haeems offers another interpretation. American monetary policy is for him the determining variable. A signal on interest rates, and not a simple rebound in prices, will put an end to the bleeding, he explains. A few elements still offer a slight respite to the markets. The CPI core rose 0.2% month-on-month, which was welcomed by bond investors.

Thus, the price of bitcoin also rose 1.5% in twenty-four hours to around $62,560. Derivatives open interest continues to rise while the Coinbase Premium Index remains negative, but appears to be on the path to rebound. These indicators are not enough to yet confirm a lasting turnaround, but they show a market which remains attentive to the slightest signal likely to mark the end of this phase of massive withdrawals.