Bitcoin ETF outflows hit $225 million as Iran tensions pressure markets

Bitcoin ETF outflows reached $225.2 million on July 23, ending a seven-session run of gains for U.S. spot Bitcoin funds, according to SoSoValue data. For everyday investors, the move shows how quickly demand for crypto exposure through brokerage accounts can shift when broader markets get nervous.

Spot Bitcoin exchange-traded funds are stock-market funds that hold Bitcoin directly, giving investors exposure to the token without requiring them to manage a crypto wallet. When these funds see net outflows, more money is leaving than entering, which can force funds to sell some Bitcoin to meet investor redemptions.

The reversal followed a weeklong stretch that had brought nearly $1 billion into the category, according to SoSoValue. Even after Thursday’s withdrawals, the funds were still up by about $274 million across the five sessions through Thursday.

Why did Bitcoin ETF outflows rise?

The outflows came as risk appetite weakened across markets. U.S. stocks fell Thursday while the continuing U.S.-Iran military exchange, now in its fifth month, kept oil prices elevated, according to the market account cited by Decrypt.

Bitcoin also moved lower during the session. TradingView data cited by Decrypt showed Bitcoin briefly falling below $65,000 and touching $64,600. Decrypt’s price screen listed BTC at $64,067, down 1.06%, while Ether was at $1,860.54, down 1.42%.

Market sentiment also deteriorated. The Crypto Fear & Greed Index from CoinMarketCap, which scores crypto sentiment from 0 for extreme fear to 100 for extreme greed, fell three points to 28 on Thursday. That reading remained in “fear” territory and marked the weakest sentiment level of the month, according to Decrypt.

Which Bitcoin ETFs lost money?

BlackRock’s IBIT accounted for most of the day’s withdrawals, with $202.5 million leaving the fund, according to SoSoValue data cited by Decrypt. Smaller outflows were recorded in Fidelity’s FBTC, Bitwise’s BITB, ARK 21Shares’ ARKB, Franklin Templeton’s EZBC and WisdomTree’s BTCW.

Morgan Stanley’s MSBT was the only Bitcoin fund listed as taking in money, adding $5 million, according to the same data.

The down day was the category’s first negative session since July 13. It followed a difficult stretch for the products: Decrypt previously reported that eight weeks of withdrawals had drained more than $8.2 billion from the same group of funds.

CoinShares’ James Butterfill previously described that earlier run as the “largest run of outflows we’ve ever seen,” according to Decrypt. Bloomberg Intelligence analyst Eric Balchunas has compared the pattern to gold ETFs’ long history, framing Bitcoin fund flows as likely to move in a “two steps forward, one step back” pattern, Decrypt reported.

Ethereum ETFs moved the other way

Spot Ethereum ETFs did not follow Bitcoin funds lower on Thursday. Ethereum products added $26.3 million, extending their inflow streak to five days, according to Farside data cited by Decrypt.

That split suggests investors were not pulling money out of every crypto ETF category at once. Instead, flows shifted differently across Bitcoin and Ethereum products during a session dominated by geopolitical and macro concerns.

The next major macro event cited by Decrypt is the Federal Reserve’s July 28-29 meeting. Rate decisions matter for crypto because higher rates can make lower-risk assets more attractive, while easier policy can support demand for riskier assets. Bitcoin’s near-term direction may remain tied to how investors read that broader rate backdrop.

This story draws on original reporting from Decrypt.