Spot Bitcoin ETFs lost $1.4 billion in net outflows this week as a sharp move in Treasury yields spooked investors into betting the Fed will hike rates again. The exodus, the biggest since the products launched, erased nearly all of the prior month's inflows.
What the bond market is saying
Yields on the 10-year Treasury jumped 18 basis points Wednesday after a stronger-than-expected durable goods report and hawkish comments from a Federal Reserve governor. That repriced the odds of a quarter-point rate increase at the June FOMC meeting to 62%, up from 34% a week earlier. For crypto traders, higher risk-free rates make Bitcoin's lack of yield less attractive.
A record reversal
The $1.4 billion outflow tops the previous high of $1.1 billion set during the March 2026 banking mini-crisis. Four of the eleven spot funds saw zero inflows for five straight days. The largest funds — BlackRock's IBIT and Fidelity's FBTC — recorded net redemptions of about $600 million and $450 million respectively, per preliminary data.
What happens to the flows
The timing isn't great for the ETF issuers. They'd just started to see steady inflows again after a sluggish April. Now the question is whether this is a one-week panic or the start of a longer rotation out of crypto as rate expectations harden. The next CPI print, due June 10, will likely set the tone. If yields keep climbing, the outflows could accelerate.
