Author: Blockchain Knight
Over the past six weeks, U.S. spot Bitcoin ETFs have experienced net outflows of approximately $6 billion, marking the longest streak of consecutive weekly outflows since their launch in 2024.
BlackRock's largest fund, IBIT, has been the hardest hit, with outflows of $1.3 billion in just the past week alone, accounting for over 70% of the entire industry's outflows for that week.
Once the smoothest entry channel for institutional participation, it has now reversed course to become the primary exit route.
So, who exactly is selling?
On-chain data reveals that long-term holders who have held Bitcoin for more than 155 days remain unmoved, still controlling about 83% of the circulating supply. The selling is almost entirely coming from allocative funds that bought ETFs through brokerage accounts.
These investors were initially attracted by the narrative of a regulated, lower-barrier entry point. Now, they are choosing to exit for the same ease of convenience, forming the first large-scale collective capitulation since Bitcoin gained Wall Street recognition.
However, the nature of the selling resembles de-risking and portfolio rebalancing rather than a wholesale rejection of the asset.
With inflation picking up, core PCE rising back to 4.1%, the Fed turning hawkish and raising rate hike probabilities, AI infrastructure attracting $700 billion in a year, and hot IPOs like SpaceX diverting speculative funds, significant capital has shifted.
Thus, when trading desks hit the button to reduce risk, Bitcoin, being treated as a high-beta risk asset, gets cut first and suffers the deepest.
Realized losses have surged 78% month-over-month. Most sellers' cost basis is concentrated between $55,000 and $68,000, with stops being triggered near the lower end of that range—behavior typical of capitulation.
Nevertheless, there are signs that the outflow velocity is slowing. From $1.72 billion in outflows in the first week of June, it has shrunk to $226.8 million by mid-month, a deceleration of nearly 90%, suggesting panic selling may be gradually exhausting itself.
However, the structural issue of the largest ETF becoming a source of selling pressure has not disappeared. IBIT's size is so large that its outflows themselves constitute pressure. On the day the entire market saw $444.5 million in outflows, all of it came from IBIT.
As this channel, which previously reinforced the narrative of institutional demand, continues to experience redemptions, the spot market must hold up without its support. Yet, current trading volumes and new capital inflows are precisely what's extremely weak.
Long-term holders, while staying put, are not being joined by new demand, making it naturally difficult to support the price.
Shrinking spot volume, cooling on-chain activity, sluggish ETF buying appetite, and a cutoff of fresh capital inflows—this isn't a major supply-side problem; it's that buyers have vanished. Therefore, when options expire and macro headwinds blow, every rebound faces the fresh test of ETF selling pressure.
The next few trading sessions may provide direction. If IBIT outflows slow down and Bitcoin can reclaim $60,000, this round of retreat could be seen as a reset of holdings, with the market able to repair itself after volatility.
But if IBIT sees significant redemptions again and the price loses the $58,000 level, then the selling pressure is far from short-term portfolio adjustments; it's a fact of departure. This would mean non-ETF spot buyers must digest the spot pressure from institutional exits alone, and the story would be rewritten accordingly.
Although the ETF launch was a major industry boon at the time, it's now clear that regulated channels can lower entry barriers but never strip away volatility. And for most, the institutional commitment threshold is far lower than we imagined.
