Spot ETF selling accelerates amid U.S.-Iran tensions
Bitcoin dropped 5.5% over the past week to around $72,600 as spot exchange-traded fund outflows intensified and U.S.-Iran geopolitical tensions resurfaced, marking a sharp reversal from the cryptocurrency’s early-May highs above $82,000.
BlackRock’s iShares Bitcoin Trust (IBIT) recorded $527.84 million in net outflows on Wednesday, May 28, the second-largest single-day withdrawal since the fund launched in January 2024. The outflow fell roughly $500,000 short of the all-time record. Across the entire U.S. spot bitcoin ETF complex, Wednesday’s combined daily outflow reached $733.43 million, the largest since late January 2026.
The broader ETF pullback reflected investor caution. Grayscale’s GBTC posted $104.76 million in outflows, while Fidelity’s FBTC shed $60.30 million. Morgan Stanley’s MSBT recorded $4.3 million in inflows, the sole bright spot among major issuers.
Despite the recent selling, IBIT remains substantially in the black. The fund has accumulated $64 billion in lifetime net inflows since launch and sits up more than $2 billion year-to-date, placing it in the top 2% of all ETFs by cumulative flows. Wednesday’s outflow represented roughly 1% of the fund’s lifetime inflows.
A notable transaction preceded the broader selloff. On Tuesday, May 27, when Bitcoin traded around $78,000, a dark-pool block trade involving 29.2 million IBIT shares worth $1.29 billion was executed, flagged by Bloomberg Senior ETF Analyst Eric Balchunas. The analyst clarified that such block trades differ from net outflows because buyers absorb the other side. IBIT’s actual net outflow on Tuesday was $192.44 million, separate from the block trade. Total bitcoin ETF volume that day reached $4.4 billion.
Geopolitical risk reignited the selloff. U.S. airstrikes on an Iranian military site near the Strait of Hormuz occurred during Asian trading hours Thursday, May 29. That same day, Bitcoin fell through the $73,000 level, declining 3.4% over 24 hours to $72,978.
JPMorgan noted that the pandemic-era “debasement trade” thesis, which underpinned much institutional bitcoin and gold demand, appears to be cooling. The bank attributed recent institutional futures positioning and ETF outflows in both assets to investors pricing in potential U.S.-Iran resolution.
Net ETF accumulation across 2026 had thinned to approximately 4,500 BTC by late May. May marked a sharp reversal from the steady buying momentum seen in March and April, flipping into net distribution. Bitcoin’s descent from above $82,000 on May 6 to under $73,000 by week’s end underscored the rapid shift in market sentiment.
