Bitcoin ETFs crushed by billions in outflows as Treasuries stifle interest-rate cut hopes Your day-ahead look for May 26, 2026 What to know: It’s getting tough for crypto bulls.
Crypto exchange-traded products (ETPs), including ETFs, have fallen out of favor with investors as the U.S
Treasury market signals higher-for-longer interest rates. Digital asset investment products recorded $1.47 billion in outflows last week, the second consecutive week of redemptions and the third-largest weekly outflow of 2026, according to CoinShares. Bitcoin Other altcoin ETFs also experienced a material moderation in flows. “Cumulative outflows over the two weeks now stand at US$2.54bn, suggesting the Iran-related risk-off has deepened and broadened despite continued CLARITY Act progress,” James Butterfill, head of research at CoinShares, said in a report shared with CoinDesk.
The outflows occurred as bond-market traders ramped up bets that the Federal Reserve will keep interest rates higher under new Chairman Kevin Warsh. Their positioning is evident from the section of the Treasury market curve, identified by the difference between two- and 10-year yields, which grew by over 12 basis points last week. The two-year yield is more sensitive to interest-rate expectations, so the widening of the spread, driven by a faster rise of the two-year yield, implies expectations of elevated borrowing costs over the near term.