Bitcoin ETF Outflows Just Hit a 3-Month High of $635 Million: What's Driving the Exit?

"U.S. spot Bitcoin ETFs bled $635 million, recording their largest outflow since late January. The reversal wasn't a one-off as there were three key factors that triggered the exodus. BlackRock's IBIT led the exit. The world's largest Bitcoin ETF accounted for nearly half of the $635 million that walked out of the spot Bitcoin ETF funds on May 13. Per SoSoValue data , that's the worst single-day reading in over three months."

"The selling didn't stop there either. Cumulative net inflows since the ETFs launched in January 2024 fell from $59.76 billion last week to $58.5 billion now-a $1.26 billion drop in five trading sessions. The last time outflows looked like this was January 29, when the ETFs recorded $1.1 billion in outflows one session during Bitcoin's winter correction. Between then and last week, outflow days averaged $340 million, and yesterday nearly doubled that."

"Markets came into this week expecting rate cuts, but by Wednesday morning, they were pricing rate hikes. Tuesday's April CPI came in at 3.8% year-over-year-the highest since May 2023. Then Wednesday morning, April's PPI hit 6%, which was the biggest wholesale-price increase since December 2022. The Iran war is the engine for the inflation spike, as gasoline alone surged 15.6% in April. Both numbers came in well above forecasts, and with the Strait of Hormuz still blocked, the inflation pressure isn't easing soon."

"Before Wednesday's PPI report, CME FedWatch put the odds of a June rate hold at 70%, with a 28% chance of a cut. After the report, markets stopped pricing rate cuts entirely. CME hike"

U.S. spot Bitcoin ETFs recorded a $635 million outflow on May 13, the largest since late January. BlackRock’s IBIT led the withdrawal, accounting for nearly half of the total and producing the worst single-day reading in over three months. Cumulative net inflows since January 2024 fell from $59.76 billion to $58.5 billion, a $1.26 billion decline over five trading sessions. The prior similar outflow pattern occurred on January 29 during a winter correction. Inflation data weakened the June rate-cut trade as April CPI rose to 3.8% year-over-year and April PPI reached 6%, both above forecasts. Inflation pressures were linked to the Iran war, including a 15.6% gasoline increase, and markets stopped pricing June rate cuts after the PPI report.

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