U.S. spot Bitcoin ETFs extended their losing streak on Friday, posting $240 million in net outflows after shedding $225 million a day earlier, according to Farside Investors. The two-day withdrawal of $465 million erased nearly half of the roughly $1 billion the funds had attracted during the previous seven-session inflow streak.

BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) accounted for nearly $415 million of the two-day outflows, signaling institutions were trimming Bitcoin exposure through the market’s most liquid ETF.

Despite the reversal, spot Bitcoin ETFs still ended the week with a modest net inflow of about $34 million, thanks to three strong inflow sessions earlier in the week.

According to Decrypt, analysts linked the selling to renewed U.S.-Iran tensions, rising oil prices, inflation concerns and growing expectations that the Federal Reserve could raise interest rates later this year.

QUICK CONTEXT: Macro Fears Challenge Bitcoin Demand

The ETF reversal highlights how closely institutional Bitcoin demand remains tied to macroeconomic conditions. After seven straight days of inflows, investors quickly shifted to a risk-off stance as geopolitical tensions in the Middle East intensified and higher oil prices revived inflation worries. Those concerns have also lifted expectations that the Federal Reserve could tighten policy further, reducing the appeal of risk assets such as cryptocurrencies.

HashKey Research said the heavy selling in IBIT suggests institutions are actively reducing short-term Bitcoin exposure rather than building long-term positions. Still, not everyone is bearish. Grayscale believes Bitcoin may have already found its bottom if the Fed refrains from additional rate hikes, while some market participants expect ETF inflows to recover if geopolitical tensions ease.

With the Fed’s July 29 policy decision approaching, macro developments are likely to remain the biggest driver of Bitcoin ETF flows in the near term.

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