Bitcoin ETF outflows mirror credit market stress
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- US spot Bitcoin (CRYPTO:BTC) ETFs lost nearly US$5 billion in the second quarter, while private credit funds faced US$15.6 billion in redemption requests.
- Fitch said many private credit investors could not withdraw all their money because fund limits were reached.
- Analysts said the outflows may reflect growing caution across higher-risk investments.
US spot Bitcoin (CRYPTO:BTC) ETFs lost nearly US$5 billion in the second quarter as investors also pulled money from private credit funds.
Private credit funds received US$15.6 billion in redemption requests, with many investors only receiving part of their money because of withdrawal limits.
“With BDCs capping redemptions at 5% quarterly, unfulfilled requests will lead to persistent elevated redemptions for many firms in the coming quarters,” Fitch said.
Bitcoin fell about 14% during the quarter, while BlackRock's iShares Bitcoin Trust (NASDAQ:IBIT) recorded about US$4 billion in outflows during June, according to SoSoValue.
QCP Capital said shrinking liquidity across private credit, energy markets and Bitcoin points to a more cautious market environment.
Fitch said new money flowing into private credit funds dropped about 56% on average, leading to net outflows at many funds.
Bitcoin ETFs and private credit funds work differently, but analysts said investors reduced exposure to both as market risks increased.
At the time of reporting, Bitcoin price was $63,817.83.
