Bitcoin ETFs See Sharpest Outflow Since June Amid Rising Treasury Yields
Bitcoin ETFs experienced their sharpest outflow in three months after absorbing nearly $1 billion just a week prior. Between September 8 and September 10, these funds shed around $449.5 million, marking the fastest reversal since June.
The selling trend began gradually on September 8 with $46.6 million outflows, followed by $120.2 million on September 9 and $282.7 million on September 10 alone, the category's worst single day since July.
This sharp decline erased a large portion of the roughly $3.3 to $3.8 billion that had flowed into these funds across three consecutive weeks from mid-August through September 4, the strongest stretch of the year.
The timing coincided with rising oil prices above $100 a barrel due to the US-Iran conflict and a 10-year Treasury yield crossing 5% for the first time since 2023. This combination makes Bitcoin a less attractive option for institutional investors who can now park their money in Treasurys yielding 5%, outperforming crypto's returns.
The Ark Invest and 21Shares fund, ARKB, suffered the most significant losses with $164.3 million outflows on September 10 alone and $250.3 million for the week. Grayscale's GBTC also shed $129.1 million, while BlackRock's IBIT lost $52.5 million for the week, despite being the largest Bitcoin ETF by assets.
The sudden reversal in investor sentiment has raised questions about who is driving these markets and why they are behaving like traders positioning ahead of a catalyst. The answer lies in the upcoming Federal Reserve rate decision on September 16, which could impact the market's perception of Bitcoin.