Inflation, not Strategy, drove bitcoin's $5.4B ETF exodus —…

Markus Thielen, founder of 10x Research, told clients Monday that the market has fundamentally misread bitcoin's recent selloff. The real culprit is not Strategy's first bitcoin sale since 2022, but a wave of institutional selling through spot bitcoin ETFs triggered by hotter-than-expected U.S. inflation data. Since the April CPI report landed on May 12, U.S.-listed bitcoin ETFs have recorded roughly $5.4 billion in net redemptions — while Strategy itself accumulated approximately $2 billion in BTC over the same period, making it one of the few net buyers.

Why it matters

Thielen's framing reorients the entire post-selloff narrative. If institutional ETF flows — not corporate treasury dynamics — are the primary price driver, then Wednesday's May CPI print becomes the single most important near-term catalyst for BTC. 10x Research's model forecasts annual inflation rising to 4.3%, above both April's 3.8% reading and Wall Street's consensus of 4.2%. A print above 4% would reinforce the case for the Federal Reserve keeping rates higher for longer, or even entertaining additional hikes — a scenario markets entered 2025 expecting to avoid entirely. Traders have already priced out multiple rate cuts; the conversation has shifted to whether the Fed's next move is a hike.

Market impact

Beyond ETF redemptions, the broader crypto flow picture has deteriorated: stablecoins saw roughly $1.7 billion in net outflows last week and $5.5 billion over the past month, signalling capital exiting the asset class rather than rotating within it. Bitcoin futures open interest has also fallen sharply as traders reduced exposure.