Bitcoin ETF outflow pain eases just as another headwind strengthens: Crypto Daily

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As traders return to their desks following an extended weekend in the U.S., there are two market dynamics worth noting that could influence the price of bitcoin BTC $ 65,033.65 and other major cryptocurrencies, which are buoyant today on the back of U.S.-Iran deal hopes.

The first relates to bitcoin spot exchange-traded funds (ETFs) listed in the U.S., which lost another $228 million in redemptions in the shortened week. That's a sixth straight week in the red, taking the cumulative figure to $5.94 billion, according to data source SoSoValue.

The good news is that the bleeding slowed for a second straight week. That follows $315.84 million in withdrawals the week before, marking a turnaround from the prior four weeks, when outflows not only topped $1 billion each week but grew larger with each passing week.

"While the market has not yet returned to sustained net inflows, the slowdown indicates that the most aggressive phase of institutional de-risking is fading, with flows shifting toward more selective and balanced positioning," Tagus Capital said in an email.

"Overall this points to 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," the firm said.

The other notable dynamic is the decoupling of the U.S. two-year Treasury yield, which is sensitive to Fed interest rate expectations, and WTI crude oil futures. While oil prices have collapsed, the two-year yield has strengthened, hovering at 4.21% as of this writing, the highest since February 2025. (Check the Daily Signal.)

The decoupling indicates that oil and geopolitical headwinds for risk assets have been replaced by Fed rate-hike expectations. It's possible markets expect the second-order effects of the March oil-price spike to keep inflation higher in the near term, raising the likelihood of interest-rate increases.

The Fed's preferred inflation gauge, the core PCE, is expected to confirm the trend. According to FactSet, it is forecast to have increased 0.37% on the month, lifting the 12-month rate to 3.4%, which would be the highest since May 2024.

Overall, the slower, yet still bleeding ETFs and hawkish hints from bond yields suggest lower odds of a convincing BTC price recovery in the short term.

And there's also what Strategy, the largest publicly listed BTC holder, does to address concerns about the price volatility of its STRC preferred stock. Stay alert!

Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's " Crypto Week Ahead ."

The chart shows the performance of the U.S. two-year yield and the Nymex-listed WTI crude futures.

The two moved in tandem after the Iran war began in early March, choking global oil supplies through the Strait of Hormuz and sending oil prices above $100 per barrel.

The two-year yield largely mimicked oil price swings from March to late May, pointing to energy prices as the most important headwind for all markets, including cryptocurrencies.

However, in recent weeks, oil has collapsed by nearly 20%, yet the two-year yield has hit 16-month highs. The divergence is telling of Fed hawkishness replacing Iran war and energy markets as a headwind for risk assets.

In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.

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