$225 Million Outflow from Bitcoin ETFs: US Treasury Yields at 18-Month High

Spot Bitcoin ETFs recorded a net outflow of $225.18 million, ending a two-week streak of inflows. This development occurred as institutional investors shifted towards US Treasury bonds due to rising US bond yields. The 10-year Treasury yield reached 4.71%, its highest level in 18 months, driven by increasing oil prices and the US-Iran conflict.

Spot Bitcoin ETF Outflows and Market Reactions

Spot Bitcoin ETFs listed in the US experienced a net outflow of $225.18 million in the last session. This outflow ended a seven-day period of positive flows, which had seen inflows of approximately $1 billion. BlackRock Bitcoin ETF (IBIT) led the outflows with $202.5 million, while Bitwise’s BITB and Fidelity’s FBTC funds also saw outflows. In contrast, Morgan Stanley’s MSBT fund recorded an inflow of $5 million.

Inflows into spot Bitcoin ETFs had driven the $BTC price to nearly $67,000. However, sentiment among institutional investors has shifted again, and capital is beginning to flow out of spot Bitcoin ETFs. The $BTC price has fallen by more than 3% in the last two days due to the US-Iran conflict and delays in passing the Clarity Act before the August holiday.

The Increase in US Treasury Yields and Its Effects

The recent Bitcoin ETF outflows coincided with institutions shifting towards US Treasury bonds due to rising bond yields. The 10-year Treasury yield reached an 18-month high of 4.71%. Economist Peter Schiff noted that the 30-year Treasury yield rose to 5.18%, its highest level since April 2006.

Trump’s latest global tariff package has heightened concerns that relations with key US trading partners could further deteriorate. Additionally, rising oil prices and the US-Iran conflict have increased the likelihood of Fed interest rate hikes. Rising financing costs could increase government interest expenses, leading to additional borrowing and fiscal spending needs.