Bitcoin ETFs bleed $326 million as Wall Street pulls back

Outflows from US spot Bitcoin exchange-traded funds went on to hit $326 million on June 5. This marks an extension of a devastating trend that has seen billions pulled from the investments to leave them with a total of just $75.1 billion in assets under management.

It is seen as an even wider reversal that has resulted in losses of almost $30 billion in the total market capitalization of the holdings since the end of May. Its aggregate size was above $98 billion at that time. The cumulative crypto market cap dropped by another 2% over the last 24 hours. Bitcoin price is down by more than 16% in the last 7 days. BTC is trading at an average price of $61,343 at press time.

The current withdrawal trend bears similarities to previous periods of institutional retrenchment during Bitcoin bear-market phases. Following the approval of U.S. spot Bitcoin ETFs in January 2024, Professional institutional ownership typically grew via multiple waves of market gains. According to data from CoinShares, institutional participation fell by 17% in Q1 2026. This represents the sharpest drop in quarterly ownership since ETFs entered the market.

This is a trend that has been observed before in the context of leveraged players reducing positions amidst steep price corrections. It enables long-term investors like investment managers, financial institutions, and sovereign wealth funds to take over the inventory. Experts point out that even if ETF flows exacerbate sell-offs in the short term, this does not imply an end to Bitcoin’s market cycle.

BlackRock IBIT posts largest Bitcoin ETF outflow

BlackRock’s iShares Bitcoin Trust (IBIT), the largest spot Bitcoin ETF by assets, lost $214 million on the day, SoSoValue data shows. Fidelity’s FBTC lost $59.7 million and Grayscale’s GBTC saw $60.8 million walk out the door. Seven other funds reported zero net change, neither gaining nor losing capital.

Only two ETFs were successful in attracting new money. Morgan Stanley’s Bitcoin Trust (MSBT) collected $4.28 million, while VanEck’s HODL recorded $4.22 million. Both amounts are negligible compared to the total loss for the day.

MSBT was created on the NYSE Arca back in April and was the first spot Bitcoin ETF issued by a US bank. Since then, the fund has collected a total of $268 million of net inflows, according to SoSoValue. 

The debut of the fund on the market amounted to $30.6 million. It has the smallest expense ratio compared to all its peers.

BTC holdings fall 17% in Q1

CoinShares data shows that quarterly 13F filings show that professional investors cut their Bitcoin holdings. It has dropped by roughly 52,500 coins in the first quarter. That’s a 17% decline and the steepest reduction since US ETFs began trading in January 2024.

Hedge funds and brokerages drove about 95% of that selling. Morgan Stanley reportedly exited an 8,300-coin position ahead of its own fund launch. However, trading firm Jane Street also trimmed 10,800 coins.

Banks seem to be moving in the opposite direction. JPMorgan Chase added 3,000 coins, and Wells Fargo picked up 4,000. Reports suggest that Citigroup filed a Bitcoin ETF position for the first time. Meanwhile, Abu Dhabi’s Mubadala sovereign wealth fund increased its holdings by about 1,100 coins.

The ETF complex has posted outflows in 14 of the last 15 trading sessions. Cumulative net inflows across all US Bitcoin ETFs still stand at $53.9 billion. However, the pace of recent redemptions (more than $3.3 billion since late May) is testing whether that figure continues to hold.

Analysts suggest that Bitcoin may need to fall to $53,000 before the current four-year cycle finds a floor. Meanwhile, it only has a probability of 25% of happening.