Bitcoin Investment Flows Turn Negative for First Time Since 2023, K33 Says

What to know

• Bitcoin investment vehicle flows turned negative for first time since 2023.
• Global Bitcoin ETP holdings fell 127,774 BTC from peak levels.
• Strategy retains sufficient reserves despite growing preferred-share dividend obligations.

Bitcoin investment vehicle flows have turned negative for the first time since November 2023, highlighting a significant shift in investor positioning across exchange-traded products and other institutional investment vehicles.

According to K33 Research Head of Research Vetle Lunde, rolling one-year notional flows across Bitcoin investment vehicles fell to negative 1,176 BTC as of June 18. The metric tracks activity across exchange-traded products and futures-based exchange-traded funds, offering insight into long-term institutional demand.

The latest reading marks the first negative annual flow figure since late 2023. According to Lunde, a similar pattern emerged during the previous bear market when annual flows dropped below zero in October 2022, shortly before Bitcoin established a cycle bottom.

However, Lunde noted that the structure of today’s market differs from previous cycles. During the 2020 and 2021 bull market, large amounts of capital entered Grayscale’s closed-end Bitcoin trust. Consequently, outflows during the following downturn mainly came from Canadian and European products as well as futures-based funds.

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Bitcoin ETP Holdings Record Largest Drawdown

K33 reported that global Bitcoin exchange-traded products currently hold 1,466,029 BTC. That figure represents a decline of 127,774 BTC from peak levels. According to the report, the decline equals an 8% drawdown from record holdings. K33 stated that this is the largest relative reduction ever recorded among Bitcoin ETPs. Previous lows reached 7.1% in February and 5.6% in April 2025.

Lunde said the scale of withdrawals points to broad capitulation among ETP investors. Moreover, both the relative and absolute size of recent outflows exceeded previous declines tracked by the research firm. Despite the withdrawals, Bitcoin ETPs have retained 92% of their peak exposure recorded in October 2025. This resilience stands out because Bitcoin has fallen roughly 50% in U.S. dollar terms during the same period.

Selling Pressure Slows While Demand Remains Weak

Although investors continue withdrawing funds, the pace of outflows has eased considerably. K33 reported average daily outflows of 625 BTC during the past two weeks. By comparison, average daily withdrawals reached 4,462 BTC between May 11 and June 5. The moderation in selling has helped Bitcoin stabilize near its 200-week moving average. Nevertheless, broader demand remains subdued.

K33 also noted that spot market activity continues to weaken. Average daily trading volume has fallen to approximately $1.99 billion, making it the third-lowest reading of the past year. According to Lunde, the market currently sits in a fragile balance. Selling pressure has eased, yet strong buying demand has not returned. Consequently, Bitcoin could experience heightened volatility once investors regain conviction.

Beyond ETF flows, K33 highlighted growing pressure within Strategy’s preferred-share structure. The firm’s preferred securities now carry roughly $1.7 billion in annual dividend obligations. Even so, Lunde said Strategy remains far from any scenario that would require selling its Bitcoin holdings. Following a recent $300 million capital raise, the company reportedly holds enough cash reserves to cover about 10 months of dividend payments.

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