U.S. spot Bitcoin ETFs saw $1.7 billion in net outflows last week, the largest single-week exodus since the funds debuted. The selloff is being driven by growing anxiety that the Federal Reserve will resume raising interest rates, a prospect that’s rattled risk assets across the board. The withdrawals mark a sharp reversal from the steady inflows that had characterized much of the spring.
Why investors are running
The trigger isn’t unique to crypto. Economic data released over the past two weeks — stronger-than-expected employment numbers and stubborn core inflation readings — have pushed expectations for a rate hike at the Fed's July meeting to roughly 45%, according to CME's FedWatch tool. Higher rates make riskier assets like Bitcoin less attractive compared to yield-bearing alternatives, and ETF investors have reacted by pulling cash out quickly. The outflows hit all 11 spot Bitcoin ETFs, though the largest funds — BlackRock's IBIT and Fidelity's FBTC — absorbed the biggest dollar losses.
One week, $1.7 billion gone
To put the number in context: the entire spot Bitcoin ETF category had only seen cumulative net outflows of about $400 million in the prior two months combined. The single-week bleed erased roughly a third of the net inflows that had accumulated since January. Trading volumes also spiked as institutions unwound positions. The selling was concentrated in the first three days of the week, with Friday showing a modest slowdown.
What this means for Bitcoin's price
Bitcoin price didn't crater, but it took a hit. The leading digital asset dropped from around $71,000 to the mid-$65,000 range over the week. The fact that it didn't fall further suggests some buyers stepped in on the dip. Still, the macro backdrop remains the dominant force. If the Fed delivers a rate hike next month, the pressure on Bitcoin ETFs — and on crypto broadly — is likely to persist. Analysts are watching the next CPI report due June 12 for further clues on the central bank's path.
What happens next
No one knows whether the outflows will continue into this week. A lot depends on the inflation data and any public comments from Fed officials. The ETF issuers themselves are staying quiet for now; none have issued statements about the redemptions. Traders are bracing for another volatile stretch, and the CME's next Fed meeting is less than five weeks away.
