Recent Bitcoin price declines are primarily due to massive outflows from spot ETFs, not the small sale by Strategy, according to Citigroup analysts. The bank emphasized that nearly $3.8 billion in ETF withdrawals have weighed heavily on BTC, overshadowing Strategy’s sale of just 32 coins worth around $2.5 million. This selling represents only the second such transaction in the company’s history and does not alter the fundamental outlook for Bitcoin, Citi noted.
ETF flows are a critical driver, accounting for about 45% of weekly Bitcoin return fluctuations. Between May 15 and June 2, U.S. spot Bitcoin ETFs saw nearly $4 billion in net outflows, with particularly large withdrawals on May 27 ($733.4 million) and June 2 ($519.1 million). This institutional demand weakness pushed Bitcoin below $67,000, reversing months of strong ETF accumulation.
Strategy’s sale occurred amid a debt repurchase program, where the company plans to buy back about $1.5 billion in convertible notes due 2029, costing roughly $1.38 billion. During this period, Strategy paused new Bitcoin purchases, and Chairman Michael Saylor indicated the company is preparing for future capital deployment. The sale appears tied to managing debt obligations rather than a shift in Bitcoin strategy.
Citi also highlighted the CLARITY Act as a potential catalyst, estimating about a 50% chance of passage in the Senate. Until then, the bank expects subdued sentiment unless regulatory clarity or other macro catalysts emerge. The bank concludes that ETF outflows remain the dominant factor shaping Bitcoin’s near-term price direction, not isolated corporate sales.