Bitcoin spot exchange-traded funds listed in the U.S. continued their six-week losing streak with $228 million in redemptions during the shortened trading week, but the pace of outflows has now decelerated for two consecutive weeks—a sign that institutional de-risking may be approaching exhaustion, according to data from SoSoValue.

Market Context

The broader crypto market found modest support Monday as U.S.-Iran deal hopes lifted sentiment across digital assets. Bitcoin traded near $64,547 per coin, while the sector benefited from reduced geopolitical risk premiums tied to Strait of Hormuz shipping concerns. However, traditional macro headwinds are shifting character: oil futures have collapsed nearly 20% from recent highs, yet the U.S. two-year Treasury yield climbed to 4.21%—its highest level since February 2025—creating a notable decoupling that signals Federal Reserve hawkishness has replaced energy markets as the dominant risk-off driver.

Analysis

The $228 million in ETF outflows marked a significant improvement from the prior week's $315.84 million in withdrawals and represented a dramatic slowdown from the preceding four weeks, each of which saw redemptions exceed $1 billion with accelerating size. Tagus Capital described the dynamic as evidence that "the most aggressive phase of institutional de-risking is fading, with flows shifting toward more selective and balanced positioning." The firm characterized current demand as "a stabilizing but still fragile ETF demand backdrop, where investors are no longer accelerating exits but are gradually repositioning capital, providing a potential floor to downside," according to an email commentary. Market participants now face a bifurcated macro environment: reduced geopolitical risk from potential Iran nuclear diplomacy contrasts sharply with renewed inflation concerns stemming from second-order effects of the March oil price spike that briefly pushed crude above $100 per barrel.

Key Numbers

- Bitcoin spot ETFs recorded $228 million in outflows for the shortened week—the sixth consecutive week of redemptions

- Cumulative ETF outflows reached $5.94 billion over the six-week period

- Prior four weeks each saw outflows exceeding $1 billion, with magnitude growing weekly

- U.S. two-year Treasury yield stood at 4.21%, highest since February 2025

- Core PCE inflation expected to rise 0.37% month-over-month, lifting annual rate to 3.4%—highest since May 2024

- WTI crude futures have collapsed nearly 20% from recent peaks

What to Watch

The Federal Reserve's preferred inflation gauge, core PCE, is due for release and carries significant implications for cryptocurrency valuations. Forecasts call for a 0.37% monthly increase that would push the 12-month rate to 3.4%—the highest reading since May 2024—potentially cementing market expectations for interest-rate increases rather than cuts. Traders should monitor whether the two-year yield can sustain above 4.21%, as further strength would compound pressure on risk assets including bitcoin. Additionally, Strategy, the largest publicly traded holder of bitcoin, faces continued scrutiny over volatility in its STRC preferred stock, which could create secondary market turbulence if shareholders seek redemption mechanisms.