Institutional capital is rapidly accelerating its withdrawal from the cryptocurrency market. Following a substantial net outflow of $2.43 billion in May – marking the largest monthly capital flight since November of last year – U.S. spot Bitcoin ETFs faced further investor exits on Monday. This extends a streak of 11 consecutive trading days with net outflows, and under the cumulative pressure of multiple bearish factors, Bitcoin plunged below the critical $70,000 threshold today (June 2), severely impacting bullish sentiment.
According to data from SoSoValue, the 13 U.S. spot Bitcoin ETFs collectively recorded a net outflow of $483.8 million on Monday. BlackRock’s IBIT spearheaded these outflows with a significant $440.3 million. Notably, the sole ETF to register a net inflow that day was Morgan Stanley’s MSBT, which attracted approximately $6.14 million.
Over the past 11 consecutive trading days of net outflows, U.S. Bitcoin ETFs have witnessed a cumulative capital flight of $3.45 billion. Andri Fauzan Adziima, Head of Research at Bitrue Research Institute, pinpointed the drivers behind May’s $2.43 billion net outflow: “The significant outflows from Bitcoin ETFs in May were driven by a confluence of factors: escalating inflation, rising U.S. Treasury yields, and the dissipation of hopes for imminent interest rate cuts.”
He further elaborated that as optimism for an improving macroeconomic environment waned, numerous institutional investors chose to reallocate capital from cryptocurrency ETFs, instead gravitating towards higher-risk assets, such as AI-driven equities.
Adziima stated, “More than ten consecutive days of capital outflows have unequivocally exposed the market’s underlying fragility. Frankly, this underscores the pervasive cautiousness among institutional investors and persistent selling pressure. This is unequivocally a bearish signal in the short term, further intensifying the risk of a deeper market correction.”
However, he posited that the current wave of withdrawals is more indicative of “prudent risk-off” strategies rather than a fundamental rejection of Bitcoin’s long-term intrinsic value.
Compounded by the challenging macroeconomic backdrop, Bitcoin extended its decline today (June 2), breaching the $70,000 mark. At the time of reporting, it stood at $69,812, marking a 4.1% depreciation over the preceding 24 hours.
Analysts generally agree that beyond the shadow of geopolitical tensions between the U.S. and Iran, a pivotal blow to market confidence came from MicroStrategy (NASDAQ: MSTR), the world’s largest corporate holder of Bitcoin, which reportedly executed its first sale of the digital asset in years.
Andri Fauzan Adziima commented, “The revelation of MicroStrategy’s Bitcoin divestment was not only ill-timed but also ignited a wave of pessimism across the market. This move unequivocally dismantled MicroStrategy’s long-held ‘never sell Bitcoin’ narrative, thereby accelerating the recent downward trend.”
Amidst the prevailing strong bearish sentiment and the sustained exodus of ETF capital, Andri Fauzan Adziima anticipates a protracted period of short-term consolidation for the cryptocurrency market, advising investors to brace for Bitcoin potentially retesting lower support thresholds.
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