Bitcoin ETFs See $1.25 Billion Outflows as Liquidity and Supply Pressures Build

U.S. spot Bitcoin (BTC) exchange-traded funds saw a sharp bout of ‘liquidity outflow’ last week, underscoring how quickly institutional positioning can shift as macro risks and on-chain supply signals converge.

Data compiled by SoSoValue shows U.S. spot Bitcoin ETFs recorded net outflows of $1.257 billion over the May 18–22 period (U.S. Eastern Time). BlackRock’s iShares Bitcoin Trust ($IBIT) accounted for the largest share with $1.008 billion in net redemptions, followed by Fidelity Wise Origin Bitcoin Fund ($FBTC) with $112 million in outflows. Morgan Stanley’s MSBT, by contrast, posted a modest $1.117 million net inflow during the same window.

As of the reporting period, total net assets across U.S. spot Bitcoin ETFs stood at $98.87 billion. That puts ETF-held Bitcoin exposure at roughly 6.49% of Bitcoin’s total market capitalization—large enough to matter for flows and sentiment, but still a minority share of the circulating market.

Beyond ETF flow dynamics, stablecoin infrastructure risk resurfaced after a security incident involving StableAR, a stablecoin issuer backed by Tether and Kraken. According to The Block, StableAR’s EURR and USDR deviated from their pegs after a multisignature wallet exploit. Attackers reportedly leveraged a weakness in a 1-of-3 multisig configuration to mint approximately $13.5 million worth of unbacked tokens. The episode renewed scrutiny around ‘reserve transparency’ and the governance controls that determine who can authorize issuance—two pillars of confidence for fiat-pegged digital assets.

On-chain activity also added a layer of caution to the near-term supply picture. PANews, citing Onchain Lens, reported that an early “Satoshi-era” miner deposited 2,650 BTC—about $203 million—into trading firms FalconX and Cumberland. The same wallet cluster is believed to still hold around 6,000 BTC. Large transfers to market-making and trading desks are not definitive evidence of selling, but they are widely tracked because they can precede distribution, hedging activity, or over-the-counter positioning that later bleeds into spot markets.

Separately, Lookonchain monitoring flagged two previously inactive wallets—dormant for more than a year—sending a combined 1,650 BTC (roughly $127 million) to FalconX within a six-hour span. Such movements tend to heighten sensitivity to potential ‘supply overhang’ at a time when ETF demand has softened.

Regulatory messaging offered a more constructive counterweight. According to Odaily, the Chair of the U.S. Commodity Futures Trading Commission said the United States has no realistic path to banning Bitcoin or crypto, arguing instead that the country is moving toward clearer standards that could serve as a global benchmark. The comments arrive as market participants continue to price policy uncertainty into risk assets, even as lawmakers and agencies debate oversight boundaries for digital commodities and stablecoins.

Still, some strategists see technical and positioning signals turning less favorable. Research firm 10x Research said its Bitcoin trend model has flipped bearish, identifying $76,088 as a key pivot level, while noting spot prices remain above it for now. The firm also pointed to growing market anxiety around Strategy’s stance on never selling Bitcoin—arguing that perceived softening of the narrative, alongside comments interpreted as leaving room for partial disposals by Michael Saylor, has weighed on sentiment.

10x Research further estimated cumulative spot Bitcoin ETF outflows of $2.7 billion since May 7, with May’s month-to-date net outflow around $1.0 billion. In its view, macro conditions are also becoming less supportive: inflation risks and rising oil prices could filter into future CPI prints, while subdued volatility, trading volume, and open interest suggest weakening ‘market conviction’ and thinner liquidity. As a relative-value expression, the firm highlighted a Bitcoin long paired with an Ethereum (ETH) short.

In stablecoin flows, Whale Alert reported that Tether Treasury transferred 140 million USDT—about $139.8 million—to Bitfinex on the Ethereum network. Exchange-directed stablecoin inflows are sometimes read as potential ‘dry powder’ for spot and derivatives activity, though the specific purpose of such transfers is often unclear without additional context from the issuer or the venue.

While Bitcoin ETF flows were negative, Solana (SOL) spot ETFs logged a positive week. SoSoValue data cited by PANews shows SOL spot ETFs recorded $15.63 million in net inflows over May 18–22 (ET). Fidelity’s fund ($FSOL) led with $13.54 million in weekly inflows, bringing cumulative net inflows to $185 million. Bitwise’s ($BSOL) added $2.40 million on the week, with cumulative inflows reported at $905 million, while VanEck’s ($VSOL) saw a $563,100 weekly outflow. Total net assets across SOL spot ETFs were reported at $971 million, with cumulative net inflows of $1.13 billion.

Industry leaders also continued to frame tokenization and AI-driven financial tools as the next growth vectors. Coinbase ($COIN) CEO Brian Armstrong wrote on X that the financial system still needs meaningful upgrades across areas such as real-world asset tokenization, 24/7 global markets, and next-generation payments. He argued that putting assets like real estate, equities, bonds, and funds on-chain could enable faster settlement, fractional ownership, and broader distribution, while stablecoins can reduce the cost of global remittances. Armstrong also called for AI-assisted risk management and credit scoring, open protocols, self-custody wallets, and more innovation-friendly regulation to expand financial access and lower the cost of capital.

In consumer-facing adoption, Decrypt reported that MoonPay launched a dedicated app within the ChatGPT platform, allowing users to purchase crypto directly during conversations. Users can review information, enter an amount, and receive a MoonPay payment link, though purchases still require standard identity checks (KYC) and wallet connectivity. Supported assets include Bitcoin, XRP, Solana, and USD Coin (USDC). MoonPay said the release aligns with its push into AI-enabled crypto tooling, following its acquisition of AI trading startup Dune Labs and the launch of its Dune CLI assistant.

Taken together, last week’s data painted a market balancing competing forces: ‘institutional flow’ pressure in spot Bitcoin ETFs, renewed attention to stablecoin operational security, and on-chain supply signals from long-dormant holders—offset by incremental regulatory clarity and continued product experimentation across tokenization and AI-driven interfaces. The near-term picture remains highly sensitive to macro prints and liquidity conditions, with ETF flows likely to remain a key barometer for momentum.