About $2.1 billion has flowed out of bitcoin spot exchange-traded funds (ETFs) so far in June.

Blockchain media outlet Decrypt reported on June 11 that this month’s outflows were already close to May’s total net outflows of $2.4 billion.

The outflows coincided with a crypto bear market. Data compiled by SoSoValue showed total net assets in bitcoin spot ETFs fell by $33.0 billion, to $77.0 billion from $109.0 billion, since May 10. Over the same period, bitcoin fell 27 percent from a May 10 peak of $81,443 to as low as $59,353 at one point.

A one-day net inflow on June 4 snapped a 13-session streak of outflows. But that did not lead to a reversal signal, as another $214 million left in a single day on June 11.

Some in the market say the pace of outflows is slowing rather than accelerating. Adam Hymes (해임스), chief investment officer at Tesseract Group, said selling pressure had not clearly stabilized, but looked closer to being exhausted than building up.

He cited three reasons behind the recent outflows. They were redemptions by leveraged money that had been arbitraging between spot ETFs and futures, a shift of money from the highest-fee U.S. spot commodity fund into other products, and a rotation of funds into artificial intelligence (AI) stocks and planned technology company initial public offerings (IPOs).

Hymes said the first two factors were structural and could ease over time. He said the third factor was a more important variable because it is tied to market risk appetite. He added that even though some other funds recorded net inflows on June 10, the overall figure remained negative, suggesting selling was concentrated in specific products rather than spreading across the broader market.

Macro factors were also cited as a burden. Geopolitical uncertainty involving the United States, Israel and Iran continued and pushed oil prices higher, raising volatility in energy prices and U.S. inflation indicators. The annual inflation rate for May rose to 4.2 percent from 3.8 percent. The U.S. Federal Reserve has kept its benchmark interest rate at 3.50 to 3.75 percent for six months.

Market views on the inflation data were mixed. Robin Singh (싱), CEO of Koinly, said a higher-than-expected rise in the consumer price index (CPI) was not favorable for risk assets such as bitcoin, but did not significantly change the market outlook itself. He said spot demand would need to recover and bitcoin would need to regain the mid-to-high $70,000 range for ETF outflows to stop. If price strength continues and draws attention again, ETF flows are also likely to follow, he said.

Hymes took a different view. “The factor that will stop ETF outflows is not a price rebound but an interest rate signal,” he said. For carry trades to work again, the return structure between futures and spot needs to recover, and asset-allocation money can only move when fears of further tightening in the market ease, he said. He added that a drop in the month-on-month core CPI increase to 0.2 percent was viewed as a somewhat positive signal in interest rate markets.

Bitcoin rose 3.90 percent over the past 24 hours to trade around $63,400, and open interest in derivatives markets increased again after weekend selling. But the Coinbase premium index remained below 0, leaving a signal that it was too early to say spot buying had fully returned.

Views also differed on the trend through the end of the quarter. Singh did not rule out a further fall into the $50,000 range, while Hymes said fund flows could stabilize before prices do. He said the market has defended the 200-week moving average over the past week, and that a scenario of building a fragile base around that level looked more plausible than a sharp rebound. He also said next week’s Federal Open Market Committee (FOMC) meeting could be a key variable in either direction.

A key level for market participants is $60,000. Hymes warned that if $60,000 breaks decisively, a larger downside could open up than a limited rebound. If rising energy prices in June inflation data spread into core inflation, fears of additional tightening could strengthen and the correction could lengthen. If core inflation holds, conditions in the second half of this year could be better than in late June, he added.