Bitcoin ETFs set for worst month with US$4bil in outflows

LONDON: US-listed Bitcoin exchange-traded funds (ETFs) are on pace for their worst month of withdrawals since launching two years ago.

Investors have pulled more than US$4.1 billion from the 13 funds in June, the highest net outflow since the products started trading in January 2024, data compiled by Bloomberg shows.

IBIT, the BlackRock Inc fund with the most assets under management, alone accounted for US$3 billion of those withdrawals.

The outflows come as Bitcoin itself is on track for its worst monthly performance since June 2022, when a chain of crypto businesses went bankrupt, culminating in the downfall of Sam Bankman-Fried’s FTX.

The token is down more than 18% this month, hovering around US$60,000 since falling through that level last week.

“The scale and duration of these outflows suggest that traditional investors remain defensive,” analysts at market intelligence firm Glassnode wrote in a recent note.

“While previous Bitcoin corrections attracted ETF buying, investors this time around are choosing to reduce exposure,” the analysts added.

Along with the spot funds, Michael Saylor’s Bitcoin accumulator Strategy, formerly MicroStrategy, has also been on the back foot.

Bitcoin’s latest selloff was sparked when Strategy sold US$2.5 million worth of its roughly US$50 billion in Bitcoin holdings.

The sale was small but symbolically significant for the market.

“Adding to the pressure, MicroStrategy’s preferred stock vehicle STRC dived 24.67% last week to US$74.57,” said Tony Sycamore, an analyst at IG Australia.

“The selloff was driven by growing concerns that the company may need to sell some of its Bitcoin holdings to meet upcoming convertible note maturities and dividend obligations,” Sycamore said.

Bitcoin was trading around US$60,000 as of 8.30am in London on Monday, down more than 50% from its October peak last year.