Bitcoin Exchange-traded funds (ETFs) have suffered outflows of nearly $5.75 billion since mid-May, fueling speculation that institutional investors are cashing out on crypto to prepare for SpaceX’s highly anticipated IPO.
Selling pressure pushed bitcoin to a 2026 low below $60,000 during the first week of June, more than 50% below its all-time high of nearly $125,000 last October. One of the dominant narratives of the sell-off is a rotation of capital out of cryptocurrencies to prepare for a series of highly anticipated initial public offerings (IPOs), starting with SpaceX (SPCX) on Friday.
Fabian Dori, chief investment officer of Swiss digital asset bank Sygnum, is not convinced.
“ETF outflows are real,” Dori said in an interview with CoinDesk. “But the data doesn’t really support the hypothesis that Bitcoin is bleeding because of the SpaceX IPO.”
If investors systematically sold bitcoin to raise liquidity for IPO allocations, exchange balances would likely show unusual outflow patterns and the stablecoin market cap would likely decline as capital left the crypto ecosystem, he claims. Neither seems to be happening.
Foreign exchange flows remain broadly normal, while the supply of stablecoins has seen little significant contraction. More speculative sectors of the digital asset market also continue to attract capital. Products tied to higher-risk crypto assets continue to garner inflows, which Dori said would be unlikely if investors abandoned the asset class altogether.
Perhaps the strongest argument against the IPO turnover theory comes from derivatives markets.
Dori pointed to a drop in open interest on CME Bitcoin futures that coincided with ETF redemptions. This relationship suggests that a significant portion of capital outflows may be related to the unwinding of spot and carry arbitrage trades rather than a reallocation of investors into equity offerings.
Cash-and-carry is a popular institutional arbitrage strategy that seeks to profit from the gap between the Bitcoin spot price and futures prices. Investors buy bitcoin for spot, often through an ETF, while also selling bitcoin futures. As long as futures contracts trade at a premium to spot prices, the investor can earn a relatively low risk return when contracts converge at expiration.
When this premium decreases or funding conditions become less attractive, traders unwind their position by selling their spot exposure and closing their short futures positions. This process can generate ETF outflows even when investors do not become bearish on bitcoin itself. Instead, the arbitrage opportunity simply became less profitable.
“Open interest rates and funding rates have moved together very positively over the same period,” Dori said. “This indicates that a significant portion of ETF flows are associated with the unwinding of carry-trade arbitrage on funding rates.”
Read more: It’s not just about Bitcoin ETFs. BTC purchases by businesses have also dried up
