In a significant blow to the cryptocurrency market, U.S. spot Bitcoin exchange-traded funds experienced their largest single-day capital exodus since late January, with investors pulling approximately $650 million as Bitcoin’s price dipped below $78,000. The sell-off was triggered by escalating geopolitical tensions between the U.S. and Iran, which drove oil prices higher and reignited fears that inflation may persist longer than previously expected.
Data from SoSoValue reveals that the ETF sector saw net outflows totaling $648.6 million on Monday, contributing to nearly $1 billion in withdrawals over the past week, ending a six-week streak of inflows. BlackRock’s IBIT led the downturn with $448.3 million exiting the fund, followed by Ark & 21Shares’ ARKB, which lost $109.6 million, and Fidelity’s FBTC, which saw $63.4 million in redemptions. Other issuers including Bitwise, VanEck, Invesco, and Franklin Templeton also recorded negative flows.
Bitcoin’s price fell below $77,000 over the weekend, a level that Bitfinex analysts describe as critical for maintaining the market’s recovery trajectory. In a report shared with crypto.news, the analysts warn that weakening institutional appetite is leaving Bitcoin more susceptible to macroeconomic shocks. They note that two primary drivers of marginal buying—spot ETFs and yield-focused products like STRC—are simultaneously losing steam as the broader economic environment becomes more challenging.
Liquidity conditions have deteriorated to their weakest point since early February, making Bitcoin highly vulnerable to external pressures and interest rate volatility. The analysts highlight that aggressive institutional participation, which fueled earlier phases of the bull cycle, is no longer evident. On-chain data further underscores this trend: the Realized Cap 30-Day Net Position Change metric, which tracks monthly capital inflows into Bitcoin’s network, climbed to about $2.8 billion per month after Bitcoin’s rally toward $82,000 earlier this month. However, this is far below the $10 billion monthly inflows seen during strong breakout periods between 2023 and 2025.
The weaker inflow profile suggests that Bitcoin may struggle to withstand sustained macroeconomic headwinds, particularly if interest rates remain elevated. The analysts also caution that inflation concerns complicate the Federal Reserve’s policy path. They note that the new Fed chair inherits a central bank that has missed its inflation target for five consecutive years, with inflation expectations no longer anchored at 2%. Despite dovish interpretations of his prior comments, the data does not support such a stance. Political pressure for rate cuts is mounting, but market expectations for the second half of 2026 are shifting away from multiple cuts toward a scenario where the Fed maintains restrictive policy to restore inflation credibility.