U.S. Spot Bitcoin ETFs End Seven-Day Inflow Streak with $225M Outflow Led by BlackRock
U.S. spot Bitcoin exchange-traded funds suffered a sharp operational reversal on July 23, shedding $225.2 million in net redemptions and snapping a seven-session streak that had injected nearly $1 billion into the market.
The contraction marks the category’s first negative trading session since July 13. Despite the daily retreat, aggregate flows for the week remained positive, with total net capital accumulation standing at approximately $274 million across five trading days.
The overwhelming majority of the sell-off came from BlackRock‘s iShares Bitcoin Trust (IBIT), which experienced $202.5 million in net outflows. Secondary redemptions hit multiple competing funds, including Fidelity’s FBTC, Bitwise’s BITB, ARK 21Shares’ ARKB, Franklin Templeton’s EZBC, and WisdomTree’s BTCW. Conversely, Morgan Stanley’s MSBT was the sole Bitcoin fund to buck the broader outflow trend, attracting $5 million in net fresh capital.
The institutional pull-back synchronized with heightened anxiety across traditional equity and commodity markets. Escalating geopolitical friction from an ongoing five-month military conflict between the United States and Iran continued to push crude oil benchmarks higher, stirring inflation fears and weighing heavily on risk assets.
In spot markets, Bitcoin temporarily broke below its psychological $65,000 support level to trade at $64,600. The downside pressure left the underlying cryptocurrency constrained beneath a “death cross”—a technical chart pattern occurring when a short-term moving average crosses below a long-term trendline, typically signaling sustained downside risk.
Reflecting the shift in market sentiment, the Crypto Fear & Greed Index dropped three points to a score of 28. While remaining inside “fear” territory, the reading represents the most pronounced level of trader anxiety recorded over the past 30 days.
The sudden turn follows a punishing two-month stretch in which crypto funds lost over $8.2 billion—a drawdown that CoinShares research head James Butterfill described as the largest consecutive capital outflow in the sector’s history before buying pressure resumed earlier this month.
Analyzing the cyclical volatility, Bloomberg Intelligence ETF analyst Eric Balchunas noted that spot crypto products are following structural adoption paths similar to physical gold ETFs after their debut, characteristically experiencing “two steps forward, one step back” momentum during macro shifts.
Crucially, institutional investor interest did not abandon the digital asset sector entirely. Spot Ethereum ETFs expanded their positive trajectory on the same day, pulling in $26.3 million to extend their net inflow run to five straight days. The divergence suggests asset allocation strategies are shifting internally between major crypto tokens rather than initiating a total exit into cash reserves.
Market participants now await the upcoming Federal Reserve policy meeting set for July 28-29, where impending interest rate decisions are expected to set the macroeconomic directional tone for risk assets heading into the next quarter.
