Bitcoin (CRYPTO: BTC) ETF net assets have fallen back to election night levels, but analyst Scott Melker argues the dollar decline is price action not capitulation, with ETFs still holding 93% of their peak Bitcoin.

The Dollar Decline Is Misleading: Coins Tell A Different Story

Total ETF net assets peaked at $169 billion in October 2025 and have since fallen 54% in dollar terms. 

However, Bitcoin holdings only dropped from 1.37 million coins at the peak to 1.27 million today, a 7.2% decline. The $4.4 billion in net outflows over the record 13-session streak represents a real but small trim relative to total holdings.

“These ETFs still hold roughly 93% of the Bitcoin that they did at the very top,” Melker said on Yahoo Finance. “The decline in price that’s being reported is price. It is not redemptions.” he added.

Fast Money Sold, Long-Term Holders Barely Moved

The seller breakdown reveals who actually left. Hedge funds sold 31,400 Bitcoin, brokerages sold 18,800 Bitcoin, and Jane Street trimmed 10,800 Bitcoin. 

Meanwhile, advisors, the largest ETF holders with 150,300 Bitcoin, cut back just 5.9%.

Moreover, banks actually added with JPMorgan Chase (NYSE:JPM) buying 3,000 Bitcoin, Wells Fargo (NYSE:WFC) adding 4,000 Bitcoin, and Abu Dhabi’s Mubadala sovereign wealth fund accumulating 1,100 Bitcoin.

The takeaway is straightforward. Leveraged traders and fast money exited while long-term institutional holders held firm and banks quietly bought the dip.

CPI Hit A Three-Year High But Core Inflation Cooled, Leaving Markets Confused

May CPI rose 4.2%, the hottest print since 2023, driven primarily by oil and gas costs from the Iran war. 

However, core CPI only rose 0.2% month over month, below expectations, creating a split reading that leaves Fed Chair Kevin Warsh with no clear path forward. Rate hikes are now being priced in while rate cuts are effectively off the table.

Bitcoin performs best when central banks loosen policy. A hawkish Fed environment tied to oil-driven inflation removes that tailwind and explains much of the selling pressure over the past month.

The next major test arrives Friday with the SpaceX IPO, already four times oversubscribed. 

Melker expects a liquidity vacuum as capital rotates into SpaceX, Anthropic, and OpenAI listings. Hyperliquid’s pre-IPO SPCX contract already trades at $163, a $28 premium to the $135 IPO price.

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