Decouple from the bull market in US stocks! Bitcoin's "high beta" logic collapses: spot ETF faces the longest outflow in history, with $2.8 billion withdrawn in nine days.

The US spot Bitcoin ETF, once hailed as the most successful ETF debut in Wall Street history, is now facing its most severe round of fund withdrawals since its launch. The latest data shows that between May 15 and 28, US-listed spot Bitcoin ETFs saw a total net outflow of approximately $2.8 billion, with funds being redeemed for nine consecutive trading days, setting a record for the longest continuous outflow since the product was launched in January 2024. This sustained withdrawal of funds comes at a time when global risk assets are rebounding across the board. While US and Asian stock markets are hitting record highs, Bitcoin continues to languish, showing that crypto assets are gradually decoupling from the traditional logic of rising risk assets. Bitcoin ETF "myth" shattered In early 2024, the US Securities and Exchange Commission (SEC) officially approved the listing of the spot Bitcoin ETF, which was seen as a significant milestone for cryptocurrencies entering the mainstream financial system. Products such as BlackRock, Inc.'s iShares Bitcoin Trust and Fidelity Investments' Wise Origin Bitcoin Fund quickly attracted billions of dollars in inflows at the start of trading. At that time, the market generally believed that spot ETFs would open the door for institutional funds to allocate Bitcoin on a large scale and become an important engine driving a long-term bull market in the crypto market. However, just over a year later, there is a clear shift in fund flows. According to market statistics, the current nine-day consecutive outflow has exceeded any previous ETF fund withdrawal cycle. Some large institutional investors are continuously reducing their positions, leading ETF managers to sell the corresponding Bitcoin spot reserves. The outflow pressure in mid-to-late May was particularly intense. According to SoSoValue data, in just five trading days from May 18 to 22, the total net outflow of 11 US spot Bitcoin ETFs reached as high as $1.26 billion, with a single-day outflow of $649 million on May 18, marking the most severe daily bloodletting since late January. Subsequently, the outflow speed continued to increase. On May 26, the Bitcoin ETF recorded a net outflow of $334 million in a single day, equivalent to about 4,400 Bitcoins being redeemed in a single trading day. Two days later, on May 28, the US spot Bitcoin ETF suffered another net redemption of $733.4 million, extending the streak of eight consecutive days of outflows, with the total redemptions during this period reaching approximately $2.6 billion. Analysts point out that this reversal of fund flow signals a decreasing risk appetite for crypto assets among institutional investors. "Trump effect" fails, Bitcoin falls over 40% from historical high Behind the fund withdrawals is the continued weakness in the price of Bitcoin. Since the global market crash in October 2025, Bitcoin has failed to recover its previous strong upward trend. As of now, the price of Bitcoin is around $73,650, down over 40% from its historical high in October last year. At the same time, other major crypto assets such as Ethereum and Solana have also shown weakness, with significantly reduced trading volumes in the entire crypto market. Former President Trump signed an executive order on May 19, instructing the federal government to update regulatory frameworks to "integrate digital assets and innovative technologies into traditional financial services and payment systems." Subsequently, the announcement of the US Bitcoin Strategic Reserve also seemed imminent, with a House version of the bill authorizing the US Treasury Department to purchase up to 200,000 Bitcoins annually over the next five years. However, Trump's declaration on social media that "we will never let cryptocurrencies down" failed to provide substantial support to the crypto market. In stark contrast, traditional risk assets worldwide continue to strengthen. The US Nasdaq and S&P 500 indices have recently hit record highs; in Asian markets, the Japanese TOPIX index and the Asia Composite index have also reached high levels. This differentiation shows that the previous logic of Bitcoin being closely tied to tech stocks as a "high beta risk asset" is weakening. Tony Sycamore, market analyst at IG Australia, said, "While other risk assets have responded positively to the news of a potential 60-day extension of the ceasefire in the Middle East, Bitcoin is increasingly decoupling from the broader risk asset market." He also pointed out that despite recent public support from US President Trump, the market has not received a significant boost. Macro environment changes weaken the appeal of crypto assets The background of this round of selling is particularly complex. The continuous fund outflows are generally attributed to the Federal Reserve's "hawkish turn" combined with the ongoing tensions between the US and Iran. Goldman Sachs Group, Inc. has postponed its expectations for a Fed rate cut to December 2026, while rising oil prices have pushed core inflation back above the Fed's 2% target level, accelerating the spread of institutional risk aversion. As the anchor of global asset pricing, the 30-year US Treasury yield has surged above 5.2% in late May, reaching its highest level since 2007. Under the dual pressure of "rising interest rates + geopolitical risks," high-volatility risk assets including Bitcoin are facing widespread sell-offs by institutional funds. Federal funds futures data show that the market's expectation of a 25 basis point rate hike by the Fed in September has risen to 67%. A unique signal challenges the traditional narrative of the crypto market: Bitcoin is increasingly decoupling from the broader risk asset market. Market observers believe that the current wave of Bitcoin ETF fund withdrawals is closely related to changes in the global macroeconomic liquidity environment. Firstly, the long-term high interest rate environment in the US has reduced the attractiveness of zero-interest income assets. With US Treasury yields rising again, institutional investors are starting to reallocate cash, bonds, and high-profit tech stocks, while high-volatility crypto assets are experiencing fund withdrawals. Secondly, escalating tensions in the Middle East leading to higher energy prices are further exacerbating market risk aversion. Although the stock market is still buoyed by the AI boom, the tolerance of institutional investors for high-risk and high-volatility assets has visibly decreased. Furthermore, the uncertainty of the US regulatory environment is also continuing to dampen market sentiment. Although spot ETFs have been approved, US regulatory agencies are still taking action on stablecoins, DeFi, and crypto trading platforms. The market is concerned that the US may introduce stricter capital and compliance requirements in the future. Warning signals abound The narrative of the largest Bitcoin bulls has weakened: from "never sell" to "possibly sell some" Amid the cold wind of macro factors, a signal in the microstructure of the Bitcoin market has caused deeper concerns than usualone of the world's largest publicly listed companies holding Bitcoin, Strategy (formerly MicroStrategy), is rewriting its narrative. During the first quarter earnings call on May 5, 2026, Strategy's founder and CEO Michael Saylor said something that the market had been waiting for five years: "We may sell a small portion of Bitcoin to pay dividends, to poke the market and make the shorts shut up." The market reacted by fallingMSTR dropped 4% that day. Previously, "never selling Bitcoin" has been Saylor's personal label and a core belief held by many holders as the ultimate purchasing power of Bitcoin. In late May, the situation escalated further. Strategy announced that it currently holds 843,738 Bitcoins with an average cost of about $75,700 per Bitcoin, totaling approximately $63.9 billion in acquisition costs. However, the company did not announce new Bitcoin purchases as it had in past weekly reports, but instead announced plans to buy back convertible bonds worth about $1.38 billion with cash. Saylor candidly stated on social media, "This week, we purchased bonds, not Bitcoin." With Bitcoin falling over 40% from its historical peak of $126,173, Strategy's stock has dropped over 72% from its high in 2025. In the coming weeks, the company will also have to face the obligation to pay dividends totaling $1.5 billion for preferred shares. Despite Saylor's claims that his long-term belief in Bitcoin surpassing gold remains unwavering, the probability on the Polymarket prediction market of "whether Strategy will sell Bitcoin by the end of 2026" has risen to 85.5%, far exceeding the 70% level a month ago. Analysts at 10x Research recently issued a warning that if Strategy is forced to sell Bitcoin to meet dividend obligations, the exit of one of the most important corporate buyers in the market may further weaken demand. Miner sell-offs combined with shrinking demand: double pressure on the supply side Apart from ETF fund outflows, a strong signal is also being released from the supply side of the Bitcoin market. According to CryptoQuant data, miners transferred about 21,000 Bitcoins to Binance on May 18, the second time the inflow of Bitcoin to Binance has surpassed 20,000 coins since February 5. CryptoQuant analysts pointed out that this is usually a signal of potential selling activity to come, amplifying supply-side pressure in the current tense market environment. At the same time, the demand in the spot market is shrinking. The Bitcoin spot trading volume on major exchanges has dropped by 15% from the 7-day average. Although the open interest in derivatives markets has increased recently to around $28.5 billion, the funding rate has turned negative to -0.005%, indicating a growing bearish sentiment among derivatives traders. Even more concerning is that the apparent demand for Bitcoin, as measured by CryptoQuant, has dropped to around -147,000 Bitcoins, marking the weakest level since 2026. This indicator tracks the market's ability to absorb newly issued Bitcoins and reactivate long-dormant coins. A negative reading directly points to the sustained weakness in the spot market's absorption capacity. Meanwhile, Bitcoin holding addresses that have been dormant for over two years are reaching historically high levels of reactivation, bringing potential additional supply to the market. The support from key institutional buyers in the form of ETFs is also diminishingafter six consecutive days of outflows, the total net inflows of Bitcoin ETFs in 2026 are close to becoming net outflows of around $536 million, just a step away from a full-year net outflow. The narrative of "digital gold" is facing challenges In contrast to the past reliance on on-chain data and retail trading behavior, ETF fund flows have now become one of the most important indicators of institutional demand for Bitcoin. Since spot ETFs directly hold real Bitcoin assets, their inflows signify real buying demand, while outflows correspond to real selling pressure. Analysts point out that the current nine-day consecutive redemptions have actually created additional selling pressure on the Bitcoin spot market. Some hedge funds have built up large positions through "ETF arbitrage trading," but with increased market volatility, these funds are now accelerating their exits. Institutional data shows that since April, the overall net assets of US spot Bitcoin ETFs have significantly decreased, with some products seeing asset under management decline by over 20% from their peak. More importantly, the safe haven logic of Bitcoin as "digital gold" is also being questioned by the market. In the context of escalating political risks, gold prices have remained high recently, while Bitcoin has not seen a synchronous increase. The market is beginning to reevaluate whether Bitcoin is truly a safe haven asset, a tech growth asset, or simply a high-volatility speculative asset. Some institutions believe that as more traditional financial capital enters the crypto market, Bitcoin is more closely correlated with liquidity cycles, rather than being a true "alternative safe haven asset." However, there are also long-term bulls who believe that the current ETF fund outflows are more of a cyclical adjustment rather than a reversal of long-term trends. Some Wall Street institutions still expect that after the Fed enters a rate-cutting cycle in the future, the crypto market may regain liquidity support. But at least for now, the US spot Bitcoin ETF is undergoing its most severe stress test since its debut, and the changing attitude of institutional funds is starting to show cracks in the "bull market narrative" of the crypto market.