Overall capital flows into Bitcoin ETFs have turned into net outflows this year. US spot Bitcoin ETFs previously experienced continuous inflows since the third week of April, but last Wednesday saw a single-day net outflow of $723.5 million, not only setting this year's largest single-day withdrawal but also ranking fifth in the history of spot Bitcoin exchange-traded products (ETPs), marking that fund flows for this type of product have completely shifted from positive to negative for the year 2026.

Bitcoin’s price retreat this year has largely synchronized with capital flow trends. This week’s shift to net outflows reflects that, amid a risk environment where popular investment themes emerge one after another and market volatility intensifies, this longstanding mainstream cryptocurrency has become increasingly lackluster. Just last Thursday, boosted by positive news that the US and Iran are close to reaching an agreement to restart navigation through the Strait of Hormuz, combined with a rally in tech stocks, the US stock market hit new all-time highs again. Investment themes such as artificial intelligence, chip manufacturing, and the return of domestic semiconductor industries continue to attract incremental institutional funds. Since the launch of the spot Bitcoin ETF in January 2024, Bitcoin’s share of risk appetite funds has fallen to a low point in this phase.

ETF buying momentum has already been weak, and the pace of spot Bitcoin holdings increase by the world’s largest publicly held institution, Strategy Inc. (MSTR), has also significantly slowed, further exacerbating this situation. During the Q1 2026 earnings conference call held on May 5, the company’s Executive Chairman Michael Saylor revealed that the company does not rule out the possibility of selling Bitcoin in the future.

According to the company’s standards, its market price issuance (ATM) mechanism used for raising funds to buy Bitcoin has currently been suspended. Strategy’s own data dashboard shows that the current stock price relative to the adjusted net asset value (mNAV) is at a multiple of 1.20x (a lower figure would be obtained using other calculations), and the company stipulates that market price issuance can only be initiated when the stock price exceeds approximately 1.22 times the adjusted net asset value.

Previously, the company relied on perpetual preferred shares STRC to raise funds and buy Bitcoin. However, the par value of these securities must be close to $100, and over the past two weeks, this condition has not been met, causing related operations to stall.

Our View

Over the past 18 months, both of the two core stable demand sources for spot Bitcoin — ETF capital and Strategy Inc.’s treasury holdings — have begun to contract. This year, many sub-sectors within the crypto market have performed well, such as AI-related tokens, perpetual contract decentralized exchanges, and privacy coins, but Bitcoin has not benefited from this, and these tokens are far smaller in scale than Bitcoin. Adding the diversion effect of various popular investment themes in the broader market, this round of Bitcoin bear market is likely to continue. From a historical cycle perspective, this judgment is even more convincing.

As of the time of writing, Bitcoin’s price is around $73.4k. From a long-term perspective, its overall performance remains robust. Market and participant sentiment naturally fluctuate cyclically, and Bitcoin has historically experienced multiple strong rebounds. Although the current trend remains weak and has yet to challenge the $100k mark again, many signs indicate that Bitcoin’s bull market is far from over.

BTC-4.25%

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