U.S. spot Bitcoin exchange-traded funds recorded $225.2 million in net outflows on July 23, according to SoSoValue data, ending a seven-day run of inflows that had brought in nearly $1 billion.

The reversal marked the category's first negative day since July 13. U.S.-listed spot Bitcoin ETFs are stock-market funds that hold Bitcoin directly, allowing investors to gain exposure without managing their own crypto wallets. The SEC approved the products in January 2024 after more than a decade of rejections, and they have since become one of the most closely watched barometers of institutional demand for Bitcoin.

An outflow means more money was redeemed from the funds than was added, requiring the funds to sell some Bitcoin to meet redemptions. Despite Thursday's losses, the products still finished roughly $274 million higher across the five trading sessions through Thursday.

BlackRock's IBIT, the largest fund in the category, accounted for most of the day's withdrawals, posting $202.5 million in outflows. Fidelity's FBTC, Bitwise's BITB, ARK 21Shares' ARKB, Franklin Templeton's EZBC, and WisdomTree's BTCW also recorded smaller losses. Morgan Stanley's MSBT was the only Bitcoin fund to attract new money, adding $5 million.

Bitcoin slips as Iran tensions weigh on markets

The ETF outflows came as broader markets weakened. U.S. stocks fell Thursday as the ongoing U.S.-Iran military exchange, now well into its fifth month, kept oil prices elevated.

Bitcoin briefly traded below the psychologically important $65,000 level, touching $64,600, and again moved under what traders describe as a death cross. A death cross is a chart pattern that forms when a shorter-term average price falls below a longer-term average price, a configuration widely regarded as a classic bear-market signal.

The Crypto Fear & Greed Index, which tracks momentum, volatility, and social sentiment to score the market from 0 for extreme fear to 100 for extreme greed, fell three points to 28 on Thursday. That kept the gauge firmly in "fear" territory and represented the most panic-driven reading of the month.

The seven-day inflow streak followed eight difficult weeks for the same Bitcoin funds, during which more than $8.2 billion was drained from the products. Bloomberg Intelligence's Eric Balchunas has compared the cycle with gold ETFs' 22-year track record, describing the pattern for Bitcoin funds as "two steps forward, one step back."

The earlier stretch of withdrawals was large enough that CoinShares' James Butterfill called it the "largest run of outflows we've ever seen" when inflows first returned in early July.

Spot Ethereum ETFs moved in the opposite direction on Thursday, adding $26.3 million and extending their own inflow streak to five consecutive days. The split suggested rotation within crypto funds rather than a broad exit from the asset class.

Bitcoin's next major macroeconomic test is set for the Federal Reserve's July 28-29 meeting. The central bank's decision on interest rates could shape the near-term macro backdrop for Bitcoin and other risk assets.