Bitcoin ETF Outflows Just Hit a 3-Month High of $635 Million: What's Driving the Exit?

• Cumulative ETF outflows reached $1.26 billion over five trading days, reducing total net inflows since January 2024 from $59.76 billion to $58.5 billion
• Rate-cut expectations evaporated as CME hike odds climbed to 39% and Polymarket now prices 62% odds of zero rate cuts in 2026, reversing the macro tailwind that drove Bitcoin's spring rally
• The CLARITY Act markup on May 14 at 10:30 AM ET represents the next major catalyst, with Polymarket pricing 73% passage odds and Citi projecting a $143,000 Bitcoin target tied directly to the bill's passage

Bitcoin ETF Outflows Summary

Key Developments

U.S. spot Bitcoin ETFs recorded $635 million in outflows on May 13—the largest single-day withdrawal since January 29. BlackRock's IBIT led the exodus with $284.69 million in outflows, representing nearly half the total. Over five trading sessions, cumulative outflows across all 11 funds reached $1.26 billion, reducing total net inflows since January 2024 from $59.76 billion to $58.5 billion.

Primary Drivers

Three major factors triggered the selloff:

1. Inflation surge: April CPI hit 3.8% (highest since May 2023), followed by PPI surging to 6% (highest since December 2022), primarily driven by a 15.6% gasoline price increase
2. Fed policy shift: Kevin Warsh's confirmation as Fed Chair (54-45 vote) locked in hawkish expectations, with rate hike odds climbing to 39% and zero-cut probability for 2026 at 62%
3. Technical resistance: Bitcoin failed to break through the 200-day moving average at $82,455, triggering $1.16 billion in profit-taking on May 4

Market Implications

Bitcoin fell below $80,000 for the first time since early May. The Coinbase-Binance premium turned negative, indicating weakening U.S. institutional demand. Markets completely abandoned June rate-cut expectations, shifting to pricing potential hikes.

Catalyst Ahead

The CLARITY Act markup vote scheduled for May 14 at 10:30 AM ET could reverse outflows. Polymarket prices passage odds at 73%, with Citigroup projecting a $143,000 Bitcoin target and $15 billion in additional ETF inflows if the bill passes Congress.