Billions flowing out of bitcoin ETFs and private credit funds suggest rising market risks
CoinDesk 2026-07-09 18:13:04
Context: Investors are pulling out billions of dollars from bitcoin exchange-traded funds (ETFs) and private credit funds, sparking concerns about rising market risks and eroding financial buffers. The simultaneous rush for liquidity in both markets, alongside a depleted U.S. strategic petroleum reserve, has raised alarm bells about the overall health of the financial system. This trend is contributing to a tougher environment for risk asset bulls.
Key Facts
- Investors pulled nearly $5 billion from U.S.-listed spot bitcoin ETFs in the second quarter, with $4 billion withdrawn from BlackRock’s IBIT in June alone, according to data source SoSoValue.
- Redemption requests in the $2 trillion private credit market surged to $15.6 billion in the second quarter, breaching standard 5% quarterly caps at 10 of the 16 business development companies (BDCs) and leaving many investors only partly paid.
- The outflow from bitcoin ETFs contributed to a roughly 14% drop in bitcoin’s price and its third straight quarterly loss, with the cryptocurrency's price falling below $60,000.
- Average redemption requests in private credit funds rose to 10.3% of shares from 9.7% in Q1, with requests ranging widely from 1.3% to 38.1% at Blue Owl’s OTIC, according to data tracked by Fitch.
- The U.S. Strategic Petroleum Reserve has dropped to its lowest level since 1983, reducing the government's buffer to flood the market with oil and keep prices lower in the event of continued energy market disruptions.