The Bid That Got Pulled

Since BTC ETFs launched, the category has posted net positive inflows across every half-year on record. Although growth slowed over time, every half ended with more BTC being accumulated via ETFs. That all changed over the last 6 months. H1 2026 ended with a net outflow of $5.4B. The first losing half in history.

We opened 2026 at $56.6B in cumulative net flows, built over two years of largely uninterrupted buying. January erased $1.6B of that. February took another $207M. By February 23, cumulative flows had fallen to $53.8B, a $2.8B drawdown in under eight weeks.

April saw a sharp reversal. BlackRock's IBIT accounted for 99.6% of the category's entire April inflow. By May 6, cumulative flows had recovered to $59.8B, $3.2B above where the year had opened. But that momentum didn’t stay long.

From May 15 to June 3, the category bled for 13 consecutive trading sessions. The longest outflow streak in the history of spot Bitcoin ETFs. $4.4B of net outflows erased April's inflows.

From Dominating Inflows to Outflows

Since launch, BlackRock's IBIT pulled in $60.3B in net flows, 3.3x that of every other fund excluding GBTC combined. Despite not having the lowest fees, BlackRock's distribution among institutional allocators and investment platforms made IBIT the default vehicle for new BTC exposure. The nine other funds added $18.1B. Grayscale's GBTC has seen $27.1B in outflows, a structural bleed driven by its 1.5% fee and two years of locked-in holders who couldn't exit until conversion. Historically, IBIT and the other funds absorbed sizable portions of the outflows from GBTC, as investors still wanted BTC exposure, just at a lower cost than GBTC's fee.

That pattern broke down in 2026. IBIT swung back to inflows in March and April, then reversed hard: May and June erased that recovery entirely. The fund that had led every prior inflow now led the outflows, with $5B in net redemptions across the two months alone, more than every other outflow month in IBIT's history combined.

ETH Faces the Same Fate

The pattern we're seeing in BTC is playing out in ETH too, and on the same timeline. Spot ETH ETFs closed H1 2026 net negative for the first time since launch: -$1.47B across 123 trading days, 73 negative days against 49 positive. Cumulative inflows since inception sit 28% below their October 2025 peak of $15.1B, at $10.9B on June 30. The same month BTC ETFs peaked before their own 18.4% drawdown.

There's another story hiding within the numbers: the rise of staked ETH ETFs. Following the SEC's May 2025 staff guidance that protocol staking isn't a securities offering, and September's generic listing standards easing the broader ETP approval process, issuers moved fast.

Grayscale activated staking on ETHE and its mini trust in October 2025, the first mover, then began distributing rewards and rebranded both products as staking ETFs in January. 21Shares started staking distributions on TETH January 8. BlackRock skipped conversion and launched a new ticker, ETHB, in March.

However, the outflows from spot ETFs far eclipsed those inflows. ETHA lost $1.51B. Fidelity's FETH lost $534M. Some outflows can be attributed to investors reallocating capital towards the yield bearing versions. But much of it is simply investors looking to reduce exposure to the asset class.

Our Take

The flows reflect broader sentiment toward crypto as an asset class. Institutional and retail interest in crypto as an investment has cooled as AI absorbs a disproportionate share of capital and attention; most sectors, not just crypto, have underperformed AI over the past year.

Institutional and retail sentiment toward Bitcoin is nowhere near the optimism of prior years, but roughly $80B still sits in BTC ETFs, capital that, in many cases, couldn't have accessed Bitcoin exposure any other way. 

Crypto has always moved in cycles. What changes each cycle is the infrastructure underneath it: the technology improves, adoption broadens, and the players paying attention get bigger. 

We’re past the point of curiosity, and large companies are actively finding ways to improve their product offerings by leveraging the tech. The fundamentals for crypto have never been stronger. It’s only a matter of time before mainstream attention returns and capital flows back into the industry.