- Spot bitcoin ETFs recorded $410.4 million in single-day outflows and nearly $1.5 billion over two weeks, led by IBIT, FBTC, and GBTC.
- Analysts cite changing rate cut expectations, flat global M2 growth, and widening credit spreads as drivers of choppy, directionless bitcoin ETF flows.
Spot bitcoin ETFs recorded another sharp setback on Thursday, with combined outflows of $410.4 million underscoring growing unease among institutional investors. The latest withdrawals extend a turbulent two-week period in which the funds have lost nearly $1.5 billion, according to data reviewed by analysts. Against a shifting macroeconomic backdrop and weakening risk appetite, the products are showing increasingly erratic flow patterns that leave retail traders facing a market with volume but little clear direction.
Institutional repositioning hits major Bitcoin ETFs
The latest wave of redemptions was led by BlackRock’s iShares Bitcoin Trust (IBIT), which saw $157.6 million exit in a single day. Fidelity’s FBTC followed with $104.1 million in outflows, while Grayscale’s GBTC shed $59.1 million, based on figures from SoSoValue. These moves contributed to six negative days for spot bitcoin ETFs over the past two weeks, reinforcing the view among market observers that institutional commitment has softened.
Analysts speaking to Decrypt said the pattern points to repositioning by large investors rather than a simple, one-directional exodus from the asset class. Nonetheless, the scale and frequency of recent outflows highlight how quickly sentiment has cooled. The impact is being felt most keenly by retail traders, who now confront a market that appears to move without a stable trend even as daily trading activity remains high.
Christophe Diserens, chief wealth officer at SwissBorg, linked the shift in flows to changing expectations around U.S. monetary policy. He pointed to the nomination of a Federal Reserve official named Kevin, which he said has pulled forward expectations of fewer near-term interest rate cuts. That adjustment has triggered swift repricing across equities, bonds, and crypto assets, contributing to the recent strain on bitcoin ETFs.
At the same time, broader sentiment indicators have deteriorated. Diserens noted that the Fear and Greed index has slipped into “extreme fear” territory not seen since 2023, a move amplified by persistent bearish commentary on social media. While this backdrop has weighed on short-term flows, he argued that the underlying growth story for Bitcoin remains intact, citing JPMorgan’s projection of a $266,000 price target as one example of ongoing institutional engagement with the asset.
A structural tug-of-war in bitcoin ETF flows
Diserens described a clash between “short-term panic and long-term optimism,” a tension he said is now visibly shaping daily fund flows. That view was echoed by Nick Motz, CEO of ORQO Group and chief investment officer at Soil, who framed the current volatility as the outcome of deeper structural forces rather than random noise.
Motz said some institutions that entered Bitcoin exposure in late 2025 are now locking in profits, while at the same time a “messy short-covering cycle” is unfolding. These dynamics, playing out simultaneously, are driving sharp reversals in spot bitcoin ETF demand. According to Motz, the process is being reinforced by algorithmic strategies that respond automatically to macroeconomic signals.
With Bitcoin hovering near $75,000, a level he identified as roughly in line with mining production costs, those algorithms are reacting to more hawkish signals from the Federal Reserve. As expectations of easier policy retreat, automated systems are triggering liquidations and portfolio adjustments, feeding the outflows from specific bitcoin ETFs.
Motz emphasized that the money leaving these funds is not necessarily departing the broader crypto ecosystem. Instead, he said a significant share is being reallocated into “more compliant derivatives channels like the CME,” where investors can maintain exposure through futures and other instruments. The end result is a market that appears active on the surface but lacks a clear trend.
He characterized this as a “liquidity mirage,” a situation in which trading volume is plentiful yet directional conviction is scarce. For many retail market participants, he suggested, the tape “looks broken,” as price swings fail to establish sustained uptrends or downtrends and sentiment weakens in response to repeated false starts.
Macro headwinds and the outlook for bitcoin ETFs
Motz expects this unsettled environment to last for some time. He projected that heightened volatility is likely to persist at least through the first half of 2026, arguing that the recent downturn has “burned out” much of the enthusiasm that built up in 2025. According to his view, the widely anticipated “structural reflation trade” is unlikely to fully materialize until the second half of 2026.
That reflation theme refers to an investment thesis centered on a broad, policy-driven phase of economic expansion and rising prices, in contrast with shorter-lived rebounds. For now, he said, the macro data do not support that scenario. Global M2 money supply growth has stalled, and high-yield credit spreads are beginning to widen. Both developments point to tighter liquidity conditions, which historically have been unfavorable for risk assets such as Bitcoin.
Given these conditions, Motz warned that markets are vulnerable to what he called “head-fake rallies.” These episodes involve abrupt price gains that appear convincing in the moment but primarily serve to pull in late buyers before a renewed downturn. In this environment, bitcoin ETF flows may continue to oscillate as investors repeatedly test the market’s resilience.
He argued that a more durable price floor is unlikely to form until credit markets complete their repricing of risk. That process, in his estimation, could extend into the summer, leaving traders facing an extended stretch of “choppy, volatile, sideways action” rather than a decisive trend. For holders of bitcoin ETFs, that implies continued uncertainty around both inflows and outflows and a higher likelihood of frequent reversals.
Sentiment indicators outside traditional markets also reflect this caution. On the prediction platform Myriad, which is owned by Decrypt’s parent company Dastan, users currently lean bearish on Bitcoin’s next major move. Participants are assigning a 61% probability that the next significant price swing takes Bitcoin down to $55,000, versus a smaller implied chance of a rally to $84,000. That bearish view has increased by more than 10% since the start of the week, according to the platform.
Conclusion
The recent $410.4 million in single-day outflows from spot bitcoin ETFs, led by large redemptions from BlackRock’s IBIT, Fidelity’s FBTC, and Grayscale’s GBTC, highlights the fragility of institutional sentiment in the current macro landscape. Over the last two weeks, nearly $1.5 billion has left these products, as shifting expectations around Federal Reserve policy, rising fear gauges, and a deteriorating liquidity backdrop weigh on risk assets.
Analysts point to a structural struggle between near-term risk reduction and longer-term belief in Bitcoin’s adoption story, a conflict that is playing out through volatile ETF flows and rapid shifts between spot holdings and derivatives exposure. With macro indicators signaling tighter conditions and credit markets still in the process of adjusting, experts anticipate ongoing turbulence and an extended period without a clear directional trend.
For now, both institutional and retail participants in bitcoin ETFs must navigate an environment defined by frequent reversals, fragile rallies, and sentiment that remains cautious, if not outright bearish, on the asset’s immediate path. For related context on inflows and outflows across crypto funds, traders are watching for signs that flow momentum can stabilize.
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