U.S. spot Bitcoin exchange-traded funds (ETFs) experienced a staggering outflow of $635 million on May 13, marking the largest single-day decline since January 29. This significant outflow was primarily driven by BlackRock’s IBIT ETF, which bore the brunt at $284.69 million. Over a five-day period, total outflows from all 11 Bitcoin funds reached approximately $1.26 billion.
Several key factors contributed to this abrupt shift. First, inflation data released on Tuesday indicated the Consumer Price Index (CPI) rose by 3.8% in April, the highest since May 2023. Following that, the Producer Price Index (PPI) surged to 6%, recording its steepest rise since December 2022. Additionally, Kevin Warsh was confirmed as the new Federal Reserve Chairman during a narrow 54-45 vote, reinforcing a hawkish sentiment among investors that escalated the probability of interest rate hikes to around 39%.
The momentum that Bitcoin ETF investments had gained in March and April, where they collectively attracted $3.29 billion, was abruptly halted. The inflow streak, which was the longest sustained period in 2026, came to a screeching halt after this week’s tumultuous events.
BlackRock’s IBIT ETF, at the forefront of the recent sell-off, accounted for nearly half of the total outflow on May 13. Data from SoSoValue highlighted this as the worst day in over three months for the ETFs. Following the sharp decline in daily inflows, cumulative net inflows since the ETFs launched in January 2024 dropped from $59.76 billion to $58.5 billion.
Market expectations for interest rate cuts were abruptly shifted following the hot inflation reports. Ben Ayers, a senior economist with Nationwide, stated that he anticipates CPI for May to exceed 4%. Bitcoin typically exhibits reactive trading patterns based on interest rate forecasts, akin to other risk assets. With rate cut optimism evaporating, institutions began shedding their Bitcoin exposure through ETF sell-offs, resulting in the massive outflow.
The confirmation of Kevin Warsh brought heightened concern. While he officially holds personal investments in cryptocurrencies, he is viewed as one of the most hawkish Federal Reserve Chairs in years. His confirmation, paired with the unfavorable inflation data, solidified an already established institutional sentiment. Adam Haeems from Tesseract Group remarked on the danger of persistent inflation, especially under Warsh’s leadership, stating this could lead to a further decline in Bitcoin value even amidst positive net inflows.
Additionally, Bitcoin recently reached a peak of $82,000, only to face resistance at the 200-day moving average, a critical long-term trend marker. The Bitcoin price tested this threshold multiple times without success, causing some parallels to market movements observed in March 2022, leading to significant declines over the following months. Profit-taking became evident when traders cashed out $1.16 billion in Bitcoin on May 4 alone, marking the largest profit-taking day since late 2025.
The current scenario hinges on the Senate Banking Committee’s markup of the CLARITY Act, scheduled for today at 10:30 AM ET. Markets are cautiously optimistic, with Polymarket assigning a 73% probability of the bill passing — a figure bolstered by Senator John Kennedy’s latest support. Analysts predict that the passage could spur an influx of $15 billion into Bitcoin ETFs, potentially reversing recent outflows and pushing Bitcoin prices up to a target of $143,000.
The next few days are crucial for determining future trends in Bitcoin investments. The outcomes of today’s markup vote, Warsh’s tone at his inauguration, and Bitcoin’s ability to hold above $80,000 by the week’s end will significantly influence investor sentiment and institutional behaviors in the cryptocurrency market.
