United States-listed bitcoin exchange-traded funds are on pace for their worst month of withdrawals since launching two years ago. Investors have pulled more than US$4.1 billion from the 13 funds in June, the highest net outflow since the products started trading in January 2024, data compiled by Bloomberg shows. The BlackRock Inc. fund, IBIT, which holds the most assets under management, alone accounted for US$3 billion of those withdrawals.
Bitcoin performance and market context
The outflows come as bitcoin itself is on track for its worst monthly performance since June 2022, when a chain of crypto businesses went bankrupt, culminating in the downfall of Sam Bankman-Fried’s FTX. The token is down more than 18 per cent this month, hovering around US$60,000 since falling through that level last week. Bitcoin was trading little changed at around US$60,000, down more than 50 per cent from its October peak last year.
Investor sentiment and analyst views
“The scale and duration of these outflows suggest that traditional investors remain defensive,” analysts at market intelligence firm Glassnode wrote in a recent note. While previous bitcoin corrections attracted ETF buying, investors this time around are choosing to reduce exposure, the analysts added.
Strategy's bitcoin holdings and market impact
Along with the spot funds, Michael Saylor’s bitcoin accumulator Strategy, formerly MicroStrategy, has also been on the back foot. Bitcoin’s latest selloff was sparked when Strategy sold US$2.5 million worth of its roughly US$50 billion in bitcoin holdings. The sale was small but symbolically significant for the market.
On Monday, Strategy unveiled a sweeping overhaul of the financing model underpinning its bitcoin strategy, giving itself broader powers to sell the cryptocurrency, buy back securities and preserve liquidity as it adapts to mounting pressure on the structure that fuelled years of aggressive accumulation.
Strategy's new financing measures
The company said it may sell up to US$1.25 billion of Bitcoin to bolster its cash reserve and established two repurchase programs of up to US$1 billion each for common and preferred shares. Strategy also said it would become more disciplined about issuing common equity, particularly when its shares trade at or near the value of its bitcoin holdings. The common shares rose as much as 8.3 per cent.
