Spot Bitcoin exchange-traded funds recorded a net outflow of $225.18 million, bringing a two-week streak of inflows to a halt. The shift came as institutional investors rotated capital toward US Treasury bonds in response to climbing bond yields. The 10-year Treasury yield reached 4.71%, its highest level in 18 months, driven by rising oil prices and escalating tensions between the United States and Iran.

Spot Bitcoin ETFs are closely watched because they provide regulated, exchange-traded exposure to BTC and have become a visible gauge of institutional demand. When Treasury yields rise, government bonds can become more attractive to risk-sensitive allocators because they offer higher income from assets generally treated as lower risk than cryptocurrencies.

Spot Bitcoin ETF Outflows and Market Reactions

US-listed spot Bitcoin ETFs posted a net outflow of $225.18 million in the latest trading session. The withdrawal ended a seven-day run of positive flows during which approximately $1 billion had entered the funds.

BlackRock's Bitcoin ETF (IBIT) led the outflows at $202.5 million. Bitwise's BITB and Fidelity's FBTC also recorded net redemptions. Morgan Stanley's MSBT fund bucked the trend, posting an inflow of $5 million.

Prior inflows into spot Bitcoin ETFs had pushed BTC to nearly $67,000. Institutional sentiment has since shifted, and capital is now moving out of the products. Over the past two days, BTC has declined more than 3%, pressured by the US-Iran conflict and delays in passing the Clarity Act ahead of the August recess.

The flow reversal puts attention on whether the outflows remain concentrated in a few products or broaden across the spot Bitcoin ETF market. Investors are also watching whether legislative delays around the Clarity Act continue to weigh on digital asset market sentiment alongside macroeconomic pressures.

Rising US Treasury Yields and Broader Implications

The Bitcoin ETF outflows coincided with a rotation by institutions into US Treasury bonds as yields rose. The 10-year Treasury yield climbed to an 18-month high of 4.71%. Economist Peter Schiff noted that the 30-year Treasury yield reached 5.18%, its highest level since April 2006.

A new global tariff package introduced by President Trump has heightened concerns that relations with key US trading partners could deteriorate further. Rising oil prices and the US-Iran conflict have also increased the likelihood of Federal Reserve interest rate hikes. Higher financing costs could push up government interest expenses, potentially leading to additional borrowing and expanded fiscal spending needs.

For crypto markets, the immediate macro focus remains on Treasury yields, oil prices, Federal Reserve rate expectations, and geopolitical developments. Those factors influence liquidity conditions and risk appetite, which can affect demand for spot Bitcoin ETFs without requiring a change in the underlying ETF structure.