U.S. investors quickly reversed course, cashing out over half a billion dollars from spot bitcoin exchange-traded funds as risk-off sentiment surfaced once again across global financial markets. The sudden shift in momentum brought a temporary halt to what had otherwise been a strong week for institutional crypto products, reminding market participants of the delicate relationship between digital assets and broader macroeconomic and geopolitical pressures.
According to data compiled by Farside Investors, a total of $635.6 million left U.S. spot bitcoin ETFs during Thursday’s trading session. This substantial wave of redemptions immediately put downward pressure on the price of bitcoin, which dropped under the $81,000 threshold at one point during the day as traders scrambled to de-risk their portfolios.
Despite the sharp intraday pullback, the leading cryptocurrency demonstrated notable resilience. The coin has since rebounded and was recently trading for nearly $81,669, representing a relatively modest decline of just 1% over a 24-hour period.
The heavy institutional outflows were broad-based, affecting nearly all major issuers in the spot bitcoin ETF space. BlackRock’s iShares Bitcoin Trust bore the brunt of the selling pressure, seeing investors cash out over $254 million. Fidelity’s Wise Origin Bitcoin Fund followed closely behind, losing close to $218 million in net redemptions. Other prominent funds also experienced significant withdrawals, with over $109 million leaving the ARK 21Shares Bitcoin ETF, while Morgan Stanley’s fund and Bitwise’s ETF lost nearly $30 million and over $27 million, respectively.
Despite Thursday’s steep losses, the wider weekly picture remains net positive. Even after accounting for the half-billion-dollar exodus, these investment vehicles have still pulled in net positive investments of over $439 million for the week as a whole, signaling that institutional appetite has not completely evaporated.
The sudden pivot toward a "risk-off" trading posture was triggered by sharp flare-ups in the Middle East that sent shockwaves through energy markets and pushed the price of oil higher. Brent crude hit its highest price in five months after Yemeni rebel group the Houthis launched an attack on Saudi Arabia on Thursday, immediately sparking acute concerns over potential disruptions to global energy supplies.
This latest energy shock compounds anxieties that have rattled bitcoin’s price throughout the year. Earlier geopolitical tensions, including conflicts involving the United States, Israel, and Iran, severely disrupted oil supplies as commercial shipping vessels struggled to pass safely through the strategic Strait of Hormuz—a vital maritime chokepoint through which approximately one-fifth of the world’s petroleum passes.
The mechanism connecting higher oil prices to a slump in bitcoin and other risk-on assets lies in monetary policy expectations. Rising energy costs inevitably fuel inflation fears, which in turn dramatically increase the likelihood that the U.S. central bank will maintain higher interest rates or even consider further tightening.
Historically, bitcoin and other speculative growth assets have tended to perform exceptionally well in low interest rate environments. Lower rates inherently inject greater liquidity into the financial system, providing the necessary capital for speculative assets to rally. Conversely, the prospect of prolonged high interest rates diminishes market liquidity, prompting institutional investors to pull capital out of alternative assets and migrate toward safer, yield-bearing instruments like U.S. Treasuries.
The macro-driven sell-off was not confined strictly to the cryptocurrency market. On the same day, investors also heavily rotated out of high-flying tech stocks. Those equities had enjoyed a robust rally earlier in the week, largely propelled by impressive earnings reports from Elon Musk’s SpaceX.
Despite the abrupt macroeconomic headwinds and Thursday’s ETF outflows, many market analysts maintain an optimistic outlook, arguing that bitcoin is structurally entering a new bull market phase. On-chain and market data from last month clearly showed that the leading cryptocurrency crossed decisively above its 365-day moving average—a widely watched technical indicator that traditionally signals a definitive exit from a prolonged bear market—following a powerful summer run in August.
Bitcoin’s price trajectory over the past year has been remarkably turbulent. The cryptocurrency notched an all-time record high of $126,080 in October 2025, capturing widespread mainstream attention. However, that milestone was followed by a sharp and severe correction later that month, triggered by the single largest liquidation event in the history of the crypto industry, which saw more than $19 billion in leveraged bets wiped out in a matter of hours.
Following that historic flush, the coin spent the first half of 2026 trading well below its previous record highs. Market sentiment gradually improved as the year progressed, with the asset picking up strong momentum again in August and September to secure its best quarterly performance in years.
