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Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis.
Today we’ll cover:
Streaks Of Bitcoin Outflows Keep Coming
Bitcoin Is Not Alone, Crypto Demand Is Falling Broadly
Bonds Pay Real Income
Bitcoin’s rebound naturally raises the question of whether investor appetite is starting to return. But rather than focusing on price, let’s look at where capital has actually been flowing across crypto and the broader market.
In case you missed it, here are the other topics we covered this week:
Bitcoin is back above $60,000 today after the Bitcoin ETFs finally recorded a day of net inflows.
It’s an encouraging headline and the market is reacting accordingly.
Before reading too much into it though, it’s worth stepping back and looking at the bigger picture.
The chart below tracks consecutive days of ETF inflows and outflows. Streaks of inflows extend upward in red, while streaks of outflows extend downward in blue.
The pattern since May has been remarkably one-sided.
Every attempt to rebuild buying momentum has stalled almost immediately. The Bitcoin ETFs haven’t managed more than a single consecutive day of inflows, while streaks of outflows have repeatedly stretched for days at a time, culminating in the longest run of outflows since the ETFs launched.
That tells us the recent bounce hasn’t been supported by a meaningful improvement in investor demand. One positive day doesn’t erase weeks of persistent capital leaving the market.
Until the ETFs can sustain inflows over several weeks rather than a single session, it’s too early to treat rallies as evidence that the broader trend has changed.
One day of inflows can lift prices, but sustained rallies require sustained demand. Since May, the Bitcoin ETFs have failed to build that momentum.
Bitcoin Is Not Alone, Crypto Demand Is Falling Broadly
We’ve spent a lot of time discussing only Bitcoin over the past few months. That’s partly because Bitcoin remains the center of institutional activity in crypto.
But looking at Ethereum helps answer an important question.
Is capital leaving Bitcoin specifically or is investors’ appetite for crypto fading more broadly?
The chart below compares the cumulative net flows into the Bitcoin and Ethereum ETFs.
Bitcoin’s flows are much more volatile, reflecting the fact that most institutional trading happens through Bitcoin. Ethereum’s ETF market is smaller, so its moves are naturally less dramatic.
Strip away that difference in scale, though, and both assets tell the same story.
Capital has been steadily flowing out of crypto for months. Bitcoin hasn’t been losing ground because investors are rotating into Ethereum. Investors have been reducing exposure to the entire asset class. That’s what happens in every bear market but it is worth stating.
As usual Bitcoin will lead the recovery when it happens. Until sustained demand returns there, it’s not even worth looking at the rest of crypto.
Ethereum confirms what Bitcoin has been telling us for months: investors aren’t rotating within crypto, they’re reducing exposure to the asset class as a whole. This is the standard behaviour in every major bear market.
Bonds Pay Real Income
Another week has passed and the macro picture hasn’t changed much. The U.S. economy remains resilient, inflation remains persistent, and investors have little reason to expect interest rates to go anywhere but higher.
That matters because Bitcoin doesn’t compete for capital in isolation.
Investors can now earn more than 2% above inflation by holding inflation-protected U.S. government bonds. For most of the past fifteen years that simply wasn’t an option. Real yields averaged zero and investors had to move further out the risk curve to generate attractive returns.
Today’s environment is very different.
Safe assets once again offer meaningful real income, while equities continue to attract investors betting on the long-term benefits of AI. Bitcoin has to compete against both of those alternatives for new capital.
Now that has been true since 2023. But what has changed recently is that investors don’t believe the situation with rates is transitory. All the evidence imply that rates will stay elevated together with inflation for a really long time. And that’s putting Bitcoin (and other non-yielding assets) at a real disadvantage in the battle for investor capital.
For the first time in years, investors can earn a meaningful return above inflation from low-risk government bonds. That raises the hurdle Bitcoin must clear to attract new capital.
Tactical Takeaway
Bitcoin’s rebound this week is nice, but it hasn’t changed the broader picture. Investors continue to withdraw capital from crypto while safe assets offer attractive real returns, leaving Bitcoin without the sustained demand needed to support a lasting recovery.
For now, our advice remains to stay patient rather than chase short-term rallies. Markets can bounce but durable rallies are built on persistent buying, not isolated bursts of optimism.
The first thing we’d look for before reassessing that view is a sustained improvement in ETF flows. A few positive days would be welcome, but what would really matter is several weeks of consistent inflows showing that institutional investors are allocating capital back into Bitcoin. Until then, the data still argues for caution.
That’s it for today. Thanks for reading.
Cheers,
Nick
P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis.
Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions.
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