Outflows From Bitcoin ETFs Surge As Treasury Yields Rise

Market Trends

The continued rise of U.S. Treasury yields is leading to an exodus of investor capital from Bitcoin (CRYPTO: $BTC ) exchange-traded funds (ETFs). On Oct. 7, about a dozen U.S. spot ETFs saw net outflows of $487.1 million U.S., the most since June 25 of this year, according to data from SoSoValue. After seeing $2.65 billion U.S. of net inflows in September, capital has again begun to leave the Bitcoin funds. So far in October, the ETFs are down $165 million U.S. The outflow of capital on Oct. 8 was unusually large. Analysts attribute the big outflow to rising yields on U.S. Treasurys or government bonds. In early trading on Oct. 8, the yield on the benchmark 10-year U.S. government bond is at 5.318%, its highest level in 24 years. Higher bond yields are more attractive to investors and lead them to move capital out of riskier assets such as cryptocurrencies and stocks. Equities are also under pressure from rising yields.

Historical Context

So far this year, funds that track the spot price of Bitcoin have taken in a net $717 million U.S. In June of this year, the funds experienced a major net outflow of $5.76 billion U.S. However, since the ETFs began trading in January 2024, they have achieved cumulative net inflows of $57.33 billion U.S.

Market Outlook

The trend of investors moving capital out of Bitcoin ETFs due to rising US Treasury yields is expected to continue. The largest outflow since June suggests that investors are becoming increasingly risk-averse and seeking safer assets. As the US Treasury yield continues to rise, it is likely that more investors will follow suit and move their capital out of Bitcoin ETFs.