U.S. spot Bitcoin ETFs have recorded $4.06 billion in net outflows this month, marking the largest monthly redemption on record according to SoSoValue data. The funds saw roughly $1.79 billion in redemptions last week alone, the second-highest weekly outflow since trading began in January 2024. This trend runs counter to expectations early in the month of renewed demand following SpaceX's IPO on June 12. June's outflows followed $2.43 billion in net redemptions in May, bringing the two-month total close to $6.5 billion, comparable to the current market capitalization of zcash (ZEC), currently ranked among the world's 15 largest cryptocurrencies by market cap. On a year-to-date basis, net outflows tally roughly $5 billion in the first half of 2026.
The Federal Reserve held its target range at 3.50% to 3.75% on June 17 and described inflation as still elevated relative to its 2% goal, keeping short-term dollar yields meaningful and the opportunity cost of volatile crypto exposure working against allocators. The Federal Reserve's June meeting tone was notably more hawkish than expected, with nine out of nineteen policymakers now expecting at least one rate hike this year, compared with none in March projections. According to market analysis, officials have leaked that a single rate hike in 2026 remains a realistic possibility. Markets have become more aggressive in their forecasts, with analysts seeing meaningful odds of additional tightening as early as July or September. Higher rates typically create a blockage for crypto markets by reducing liquidity and making risk assets less attractive. Bitcoin fell 2.5% to $62,674.70 by 18:14 ET on Tuesday, further reversing a weekend recovery as concerns over rising U.S. interest rates kept cryptocurrencies largely on the back foot.
Bitcoin and Ethereum experienced significant declines alongside semiconductor stocks, particularly NVIDIA, as reported by crypto news sources. The correlation stems from institutional funds that previously piled into both crypto assets and AI-related chip companies during the liquidity-fueled rally of the past two years. These funds are now trimming exposure as interest-rate fears return, creating a unified 'high risk, high reward' trade across these asset classes. According to market analysis, crypto is increasingly trading like high-beta tech assets, with the days of financial rebellion now long gone. The impact of this collapse in institutional demand is evident in bitcoin's price performance, which has declined around 30% in the first half, underperforming nearly every major asset class except Strategy (MSTR). Shares in the bitcoin-holding publicly listed firm have tanked by 45%.
Broader crypto prices declined, tracking Bitcoin's weakness. World no.2 crypto Ether dropped 3.7% to $1,669.50, while XRP shed 2.1% to $1.10. BNB, Solana, and Cardano slipped 2.3%, 4.3%, and 5% respectively. Among memecoins, Dogecoin lost 4.6%, while $TRUMP was down 6%. The decline was compounded by a global sell-off in technology stocks, with the tech-heavy Nasdaq Composite tumbling more than 2% on Tuesday. Some positive economic data on U.S. business activity did little to lift spirits, as the headline composite PMI output index ticked up to 52.2 in June from 51.5 in May, a five-month high.
