Bitcoin selloff blamed on inflation-driven ETF redemptions, May CPI key
10x Research’s Markus Thielen says bitcoin’s recent slide is being misattributed to corporate Strategy (MSTR). Instead, the main driver is institutional selling through U.S. spot bitcoin ETFs after hotter-than-expected inflation.
Since the April U.S. CPI release (May 12), U.S.-listed bitcoin ETFs have recorded about $5.4B in net redemptions. Over the same period, Strategy was a rare buyer, accumulating roughly $2B worth of BTC—yet ETF outflows have dominated price action.
Thielen points to Wednesday’s May CPI as the near-term catalyst. His model forecasts annual inflation rising to 4.3% (above April’s 3.8% and Wall Street’s ~4.2%). A print above 4% could reinforce “higher for longer” Fed expectations, pushing yields up and pressuring risk assets—typically a headwind for bitcoin. Thielen expects a possible early-week relief rally, but warns it may fade if inflation surprises to the upside.
Broader flow indicators also look weak. Stablecoins saw about $1.7B net outflows last week and $5.5B over the month, suggesting capital leaving crypto. Bitcoin futures open interest has also fallen as traders reduced exposure.
Key trading takeaway: Thielen says ETF flows remain the “most important metric” for bitcoin, so watch spot ETF redemption pace into the May CPI release to judge whether the correction stabilizes or deepens.
Bearish
The article frames bitcoin’s weakness as primarily ETF-driven rather than corporate “Strategy” news. With roughly $5.4B in net redemptions since the April CPI beat, the marginal buyer story can’t overpower institutional outflows. If Wednesday’s May CPI prints above 4%, markets may price fewer (or no) rate cuts, keeping rates higher for longer—an environment that historically pressures liquidity and risk assets, which usually weighs on BTC.
Short term, that sets up a “relief rally then fade” risk: even if BTC looks technically oversold, continued ETF outflows and weaker broader flows (stablecoin outflows and falling futures OI) can cap rebounds quickly. This resembles past post-hot-inflation episodes where BTC bounces on oversold conditions but loses momentum once macro repricing dominates.
Longer term, bitcoin’s recovery odds improve only if ETF flows stabilize (net creations) and macro expectations shift toward easier policy. Until then, traders should treat ETF redemption pace into the CPI as the dominant signal for trend continuation versus stabilization.