US spot Bitcoin exchange-traded funds posted $462.7 million in weekly net outflows across all four trading sessions, ending a three-week stretch of heavy investor demand.
The withdrawals marked the first weekly loss for Bitcoin ETFs since mid-August. Outflows accelerated mid-week: Tuesday saw $46.7 million leave the products on the first trading day after Labor Day, followed by $120.2 million on Wednesday and $282.6 million on Thursday. Friday outflows eased to $13.3 million as Bitcoin stabilized.
The reversal came after investors had poured roughly $3.8 billion into Bitcoin ETFs over the prior three weeks as the asset briefly rallied above $80,000. Bitcoin’s price dipped to $76,000 during the week before rebounding to $79,800.
Research platform Ecoinometrics flagged the significance of a key support level. “The short outflow streak is not yet enough to establish a lasting reversal in ETF demand,” the firm stated. “But an extended streak would make it increasingly difficult for Bitcoin to hold above $75,000.”
Higher Treasury yields are pressuring Bitcoin demand. The 10-year Treasury yield approached 5% during the week, closing Friday at 4.93%. Because Bitcoin generates no yield of its own, rising interest rates increase the opportunity cost of holding it relative to bonds and other fixed-income assets.
Investors may have reduced risk ahead of a major monetary-policy decision. The Federal Open Market Committee is scheduled to meet September 15 to 16, with Chair Kevin Warsh announcing the decision on September 18 at 2 p.m. Eastern time, followed by a press conference 30 minutes later.
Inflation data released last week showed a 0.4% US consumer price increase in August and 3.4% year-over-year growth, setting the backdrop for the Fed’s decision.
Ecoinometrics noted the tension between competing narratives driving Bitcoin demand. “The debasement narrative can only offset tighter financial conditions for so long while interest rates continue climbing,” the firm said. The debasement trade rests on demand for scarce assets as investors seek protection against persistent inflation and expanding government debt. Tightening financial conditions, however, can erode that appeal.
