Key facts
- US spot crypto ETFs experienced $609.3 million in net outflows.
- Bitcoin fell to $65,700 and Ether dropped below $1,900.
- BlackRock's iShares Bitcoin Trust saw $388.6 million in withdrawals.
- Total Bitcoin ETF outflows for June exceeded $1 billion.
- Bitcoin has lost over 16% of its value in the past month.
- AI stocks and upcoming IPOs are drawing capital away from crypto.
Bitcoin has experienced a significant decline, losing over 16% of its value in the past month while the S&P 500 reached all-time highs. This downturn is attributed to substantial outflows from spot Bitcoin ETFs, which have shed 62,794 BTC over three weeks, marking the second-largest outflow streak on record. Analysts suggest that Bitcoin is no longer capturing the 'momentum trade,' with capital now flowing into artificial intelligence stocks and anticipated IPOs. Charles Schwab's Jim Ferraioli noted that Bitcoin has been in a bear market since October, and investors are following hot trades, which currently favor AI-related companies like Nvidia. The opportunity cost of holding Bitcoin is perceived as too high when AI stocks are soaring. Derivatives markets also show warning signs, with CME Bitcoin futures open interest at its lowest since October 2023 and leveraged long positions building into a weakening market. A notable $1.26 billion block sale of BlackRock's IBIT ETF was flagged as a large investor exiting Bitcoin. The total crypto market capitalization has fallen to $2.38 trillion, down 46% from its October peak.