Bitcoin ETF Outflows Hit $1.25bn as Nasdaq Wins BTC Options Nod

Bitcoin faced its sharpest week of institutional selling in 2026, sliding to $74,344 as spot ETF outflows hit $1.25 billion and $917 million in leveraged positions were wiped out in a single day. Yet in that same week, the SEC gave Nasdaq conditional approval to list cash-settled Bitcoin index options — a sign that while short-term confidence wobbled, the long-term institutional architecture for Bitcoin keeps expanding.

Bitcoin Drops to $74,344 Amid Market Turbulence

The week ending 25 May 2026 brought the deepest correction in Bitcoin since earlier in the year. The token fell to a low of $74,344 — a decline of roughly 10% from its level at the start of the week. The sell-off was fast and deep enough to trigger cascading liquidations across the derivatives market.

In just 24 hours at the height of the decline, $917 million in crypto positions were liquidated. Liquidations occur when leveraged trades — bets made using borrowed capital — are automatically closed because losses have exceeded the deposited margin. Long positions, meaning bets on rising prices, made up the majority of those forced closures. Traders who had been expecting further gains were caught off guard by the speed of the move.

Ethereum, Solana, XRP, and most major altcoins fell alongside Bitcoin. Approximately $200 billion was wiped from total crypto market capitalisation during the week. For retail investors who had entered at higher prices during the spring rally, this was a painful correction.

$1.25 Billion Exits US Bitcoin ETFs in One Week

The figure that stood out to institutional observers was not the price itself but the scale of ETF outflows. US-listed spot Bitcoin exchange-traded funds — launched in January 2024 to give traditional investors exposure to Bitcoin without direct ownership — saw net outflows of $1.25 billion over the week.

BlackRock’s iShares Bitcoin Trust (IBIT) accounted for the largest single share, losing an estimated $500 million. Fidelity’s Wise Origin Bitcoin Fund (FBTC) saw approximately $300 million leave. The remaining $450 million was spread across funds from Ark Invest, Invesco, WisdomTree, and others. Together, these were the largest weekly net outflows from Bitcoin ETFs since the products launched in early 2024.

These funds have become central to the Bitcoin story. When inflows are positive — as they were for much of late 2025 and early 2026 — they signal that institutional allocators are increasing exposure, which tends to support prices. When they turn negative, as happened this week, it suggests those institutions are trimming positions.

Why Institutions Were Selling

Three factors drove the institutional selling simultaneously. First, automated risk management. Many large financial firms operate rules that force position reductions when an asset falls by a set percentage. Bitcoin’s break below $80,000 — treated as a key psychological support level — triggered automatic sell orders at multiple firms at once.

Second, rising US Treasury yields created headwinds across risk assets. Bond yields rose sharply during the week as investors worried about the pace of government borrowing and the Federal Reserve’s rate outlook. When yields rise, the relative attractiveness of riskier assets like Bitcoin falls, and capital tends to rotate toward bonds.

Third, some of the selling was straightforward profit-taking. Bitcoin had gained significantly from lows earlier in 2026. A portion of the ETF outflows represented investors locking in gains rather than riding out further volatility — a rational response when managing risk on behalf of clients with defined risk limits.

Nasdaq Receives Conditional SEC Approval for Bitcoin Options

While the price action dominated headlines, the more structurally significant development of the week was quieter. The SEC gave Nasdaq conditional approval to list cash-settled Bitcoin index options under the proposed ticker QBTC. The conditions require Nasdaq to demonstrate adequate market surveillance capabilities before trading can begin, which is expected within three to four months.

Options are contracts that give the buyer the right — but not the obligation — to buy or sell an asset at a predetermined price by a specified date. They are fundamental to how institutional investors manage risk. Pension funds use them to protect portfolios against sharp losses. Asset managers sell them to generate additional income on holdings. Hedge funds use them to express directional views with controlled risk.