Bitcoin ETF Outflows Slow, but Fed Rate-Hike Bets Add Fresh Pressure

Outflow pressure from U.S. spot Bitcoin exchange-traded funds is easing, but expectations for higher U.S. interest rates are emerging as a new headwind, according to CoinDesk.

In a Daybook report published June 22, CoinDesk said Bitcoin and other major cryptocurrencies are rebounding on hopes for a U.S.-Iran agreement, but two key variables still overhang the market.

The first is fund flows for U.S. spot Bitcoin ETFs. SoSoValue data showed the funds recorded net outflows of $228 million last week, extending the streak of weekly withdrawals to six. Cumulative net outflows reached $5.94 billion.

Even so, the scale of the outflows narrowed for a second straight week. Net outflows totaled $315.84 million a week earlier, after more than $1 billion exited the funds in each of the previous four weeks.

Tagus Capital said the market has not yet returned to sustained net inflows. Still, the deceleration in outflows suggests institutional investors are easing back from an aggressive phase of risk reduction.

CoinDesk said ETF demand remains fragile, but the fact that investors are no longer accelerating their exits could provide some support for Bitcoin on the downside.

The second variable is the U.S. short-term Treasury yield. CoinDesk said the two-year Treasury yield recently rose to about 4.21%, the highest level since February 2025, even as oil prices have dropped sharply.

That indicates that as Middle East geopolitical risks and oil-related pressure recede, expectations for Federal Reserve rate hikes are becoming a new burden for risk assets.

Since March, oil prices and the two-year Treasury yield had moved in tandem as concerns over a war involving Iran and supply disruptions in the Strait of Hormuz lifted both, CoinDesk said. More recently, however, the two-year yield has climbed even as oil prices have fallen about 20%.

The market appears to be reflecting the secondary effects of March's oil-price surge on near-term inflation. U.S. core personal consumption expenditures prices are forecast to rise 0.37% on the month and 3.4% from a year earlier. That would mark the highest level since May 2024.

CoinDesk said the chances of a strong near-term recovery in Bitcoin have diminished, citing continued ETF outflows, albeit at a slower pace, and hawkish signals from the bond market.

It added that investors should also watch how Strategy, the world's largest publicly traded corporate holder of Bitcoin, responds to concerns over price volatility in its STRC preferred shares.