US spot Bitcoin ETFs just had their worst week in months, shedding roughly $462.7 million in net outflows between September 8 and 11. The reversal is especially jarring given that the previous week saw nearly $987 million flow in the opposite direction, including a single-day haul of about $730.9 million on September 3.
Markets are now pricing in an approximately 87% chance of a 25-basis-point rate hike at the September 16 FOMC meeting, and institutional investors appear to be pulling back from risk assets accordingly.
Where the money went
September 10 was the ugliest day of the bunch, with $282.6 million leaving spot Bitcoin ETFs in a single session. ARK 21Shares’ ARKB bore the brunt of it, accounting for roughly $164.3 million of that daily exodus. Grayscale’s GBTC, BlackRock’s IBIT, and Fidelity’s FBTC rounded out the list of products seeing meaningful redemptions.
Bitcoin’s price reflected the mood, sliding from approximately $77,362 to about $76,816 over the same stretch.
The Fed factor
An 87% implied probability of a rate hike is about as close to a foregone conclusion as markets get without the Fed explicitly telegraphing the move. Higher rates tend to strengthen the dollar and raise the opportunity cost of holding non-yielding assets like Bitcoin. Treasury yields have climbed in tandem with these expectations, creating additional pressure on risk assets across the board.
The bigger picture still looks solid
Cumulative net inflows into these products since their January 2024 launch have surpassed $55 billion. Total assets under management across the category sit somewhere between $97 billion and $148 billion, depending on which tracker you consult. A single week of $462 million in outflows, while notable, represents less than 1% of total AUM even on the conservative end of estimates.