Grok AI Musk Bitcoin prediction. Photo by BeInCrypto

Spot Bitcoin ETFs are posting their heaviest withdrawals since May, signaling a clear shift in institutional positioning as risk conditions tighten across global markets.

CryptoQuant data shows redemptions have climbed to roughly $2.3 billion from their recent peak, reversing a month-long stretch of inflows.

According to SoSo Value data, the weekly outflows from the Bitcoin ETFs underscore the shift.

In the last seven days, the spot Bitcoin ETFs shed nearly $2 billion, one of their steepest weekly declines since the products launched.

Bitcoin ETFs Drawdown. Source: CryptoQuant

Notably, the selling has been concentrated in a handful of large BTC investment vehicles of BlackRock’s IBIT and Fidelity’s FBTC. However, that total flow pressure is broad enough to suggest a wider retreat rather than isolated rebalancing among specific funds.

Meanwhile, the current pace places redemptions at a six-month high. In May, investors pulled more than $4.8 billion from spot ETFs amid heightened volatility and a rapid repricing in derivatives.

While conditions are less chaotic than earlier in the year, the flow pattern shows investors reducing risk. Rising Treasury yields are pulling professional allocators toward assets with more predictable income.

Indeed, the US 10-year yield has risen sharply in recent weeks, and that shift has historically dampened demand for high-beta assets. Bitcoin typically weakens in these periods as investors rotate toward instruments with clearer yield profiles.

Bitcoin’s own price action reinforces the trend. According to BeInCrypto data, the asset has declined by approximately 16% since early October and trades at $101,804 as of press time.

Much of the drawdown occurred after the October 10 liquidation cascade, which wiped roughly $20 billion in market value and forced leveraged traders to reduce their exposure.

That shift reset positioning across perpetual futures and options, and the subsequent cooling in ETF demand reflects continued defensive posturing.

Analysts say the flow-price dynamic has become more pronounced as ETFs take on a larger share of market-moving liquidity. Heavy redemptions force issuers to unwind their underlying Bitcoin holdings, adding incremental selling pressure during periods of muted risk appetite.

Conversely, inflows tend to stabilize markets by absorbing spot supply. This structural link has made ETF flows a real-time gauge of institutional conviction—and a key driver of short-term price behavior.

Still, the latest withdrawals do not yet resemble capitulation. Portfolio managers appear to be rotating into duration-sensitive instruments rather than abandoning digital assets outright.