U.S. spot bitcoin exchange-traded funds lost $729 million in net outflows on Wednesday and Thursday, according to data from Farside Investors, reversing an inflow streak that had carried bitcoin toward $90,000 last week.

Funds managed by BlackRock, Fidelity, Morgan Stanley and ARK 21Shares all posted significant redemptions across the two sessions. The turn came after a choppy start to the week: investors sold close to $90 million in shares early on, then bought nearly $119 million on Tuesday, before the outflow wave hit midweek.

Why did investors pull money out?

Macro and geopolitical catalysts drove the reversal. Markets repriced the likelihood of the Federal Reserve raising interest rates, while Brent crude jumped after renewed attacks on tankers in the Strait of Hormuz, which pushed transits through the chokepoint to their lowest level in more than two months.

U.S. President Donald Trump also signaled that talks with Iran were not progressing, raising expectations that conflict in the Middle East could drag on.

The mechanics are straightforward for institutional allocators. Rising oil prices tend to reinforce bets on tighter Fed policy, and higher rates drain liquidity from risk assets such as bitcoin. The caveat: the correlation is not mechanical. When the Fed raised rates by a quarter of a percentage point last month and talked tough on inflation, bitcoin's price still rose in the days that followed.

Where does bitcoin stand now?

Bitcoin recently traded a little over $82,688, down more than 3% over seven days, though it rebounded nearly 2% over the past 24 hours. The coin was closing in on $90,000 as recently as last week, when positioning built around "Uptober" — a month that has historically delivered positive returns for bitcoin speculators.

The asset remains 34% below the all-time high of $126,080 it touched in October. Bitcoin has spent most of 2026 in a bear market, but analysts increasingly point to evidence of a bull market forming after rallies in August and September.

What happens next?

The near-term direction of ETF flows likely hinges on the Fed's next policy decision and any escalation in the Strait of Hormuz, both of which will determine whether this week's $729 million redemption wave marks a pause or a durable turn in institutional demand for spot bitcoin exposure.