An ETF outflow no longer automatically means bitcoin got sold on the spot market. Since the US Securities and Exchange Commission approved in-kind creation and redemption for spot bitcoin and
An ETF outflow no longer automatically means bitcoin got sold on the spot market. Since the US Securities and Exchange Commission approved in-kind creation and redemption for spot bitcoin and ether ETFs, according to CoinDesk, which dates the decision to 29 July 2025, funds can hand over actual bitcoin or ether to authorized participants instead of cash, so a large daily outflow can reflect a transfer of coins rather than a forced sale. Whether a specific outflow triggered real spot selling depends on which settlement method was used, and that detail is not published alongside the headline flow figure.
A spot bitcoin ETF holds real bitcoin with a custodian and issues shares that trade on a stock exchange, according to crypto.news. The share count is not fixed: when demand for shares runs ahead of supply, new shares are created and bitcoin enters the fund; when supply runs ahead of demand, shares are destroyed and bitcoin leaves. crypto.news describes an inflow as the fund growing and acquiring coins, and an outflow as the fund shrinking and shedding them.
Ordinary investors cannot create or redeem shares directly. That role belongs to authorized participants, large trading firms and banks that contract with each fund to keep its share price aligned with the value of the coins behind it, per crypto.news, which names Jane Street, Virtu and JPMorgan Securities as examples of firms acting in this role. If buying pressure pushes a fund’s share price above the value of its bitcoin, an authorized participant delivers bitcoin or cash to the fund, receives new shares, and sells them into demand, counted as an inflow. If selling pressure pushes the price below the value of the coins, the authorized participant buys discounted shares on the exchange, returns them to the fund, and receives bitcoin or cash back, counted as an outflow. crypto.news notes that flow data measures this net expansion or contraction of the share pool, not the far larger volume of ordinary trading between investors, which leaves the fund’s size unchanged.
When the SEC first approved the spot bitcoin ETFs in January 2024, it required all creations and redemptions to settle in cash, per CoinDesk. Authorized participants could not touch bitcoin directly. The Block, in a verbatim excerpt held by this desk, described the arrangement as one where the SEC’s cash model required firms like BlackRock to “move bitcoin out of storage, sell it right away” and then return cash to the investor. Under that regime, an outflow meant the fund itself had to sell bitcoin on the market to raise the cash, and an inflow meant it had to buy. Flow data in that period had a direct, mechanical link to spot buying and selling pressure.
The SEC voted to approve in-kind creation and redemption for crypto exchange-traded products, then granted accelerated approvals to Nasdaq, NYSE Arca and Cboe BZX Exchange covering funds including BlackRock’s bitcoin and ether ETFs and products from Ark21, Fidelity, VanEck and Franklin Templeton, according to The Block. CoinDesk’s byline dates the decision to 29 July 2025. Cointelegraph describes it only as “a Tuesday announcement,” without giving a calendar date. SEC Chairman Paul Atkins said in a statement, quoted by both outlets, that it was “a new day at the SEC,” and that the new rules would make crypto exchange-traded products “less costly and more efficient.” Jamie Selway, director of the SEC’s Division of Trading and Markets, said the change would bring “flexibility and cost savings” to issuers, authorized participants and investors, per Cointelegraph.
The practical effect, per CoinDesk, is that authorized participants can now deliver actual bitcoin or ether when creating shares, and receive actual bitcoin or ether when redeeming them, instead of routing every transaction through cash. This changes what a reported outflow can mean: under the cash regime, a redemption required the fund to sell bitcoin on the market to raise cash; an in-kind redemption instead moves bitcoin out of the fund’s custody and into the authorized participant’s hands without that sale being required at the moment of redemption. crypto.news’s own account of this mechanism, in the version held by this desk, is cut off before it states what a redeeming authorized participant then does with that bitcoin. On the evidence held here, this desk cannot say whether that bitcoin is typically sold promptly, held, or moved off-exchange. The reasonable inference is that an in-kind outflow no longer guarantees the same-day spot sale that a cash outflow did — but that is an inference about how the mechanism is structured, not a reported fact about what authorized participants actually do with the coins afterward.
On 14 May 2026, US spot bitcoin ETFs recorded a single-day net outflow of $635 million, the largest since late January 2026, according to CoinDesk, which cited data from SoSoValue. Over the five trading days that included that outflow, the funds shed a combined $1.26 billion, pulling cumulative net inflows since the ETFs’ January 2024 launch down to $58.5 billion, from $59.76 billion a week earlier. CoinDesk reported that bitcoin’s price had stalled below its 200-day moving average, then near $82,000, slipping to around $79,400 in the 24 hours before publication, after a rally that had earlier carried it from $65,000 past $80,000. The 11 US-listed funds had taken in $3.29 billion through March and April 2026 before this stretch of outflows began, per CoinDesk.
A month later, more than $4 billion left the US spot bitcoin ETFs over the course of June 2026, which crypto.news described as the worst monthly stretch since the products launched. Neither CoinDesk nor crypto.news states, in the articles held here, whether the May or June 2026 redemptions were processed in cash or in-kind. That means it is not possible, from this evidence, to say how much of that money represented bitcoin actually sold into the spot market during those episodes, as opposed to bitcoin transferred to authorized participants and disposed of on their own schedule.
Separately from the settlement-method question, CoinDesk ran its own statistical check on whether flows and price move together at all. Using SoSoValue data, CoinDesk calculated a 90-day rolling Pearson correlation coefficient between bitcoin’s daily percentage price change and the daily percentage change in cumulative ETF net inflows. That coefficient stood at 0.16 as of the 14 May 2026 article, which CoinDesk described as statistically indistinguishable from zero, down from a peak of 0.68 in February 2026. CoinDesk’s own conclusion, stated in the piece, was that knowing which direction flows moved on a given day may not offer any cue about bitcoin’s price action that day, even as it added that large redemptions like the one on 14 May 2026 still matter.
This is a second, independent reason to read a single day’s flow number cautiously, on top of the cash-versus-in-kind question. Even in a period when every outflow forced a real spot sale, the correlation between flows and price could weaken for other reasons, including other buyers and sellers active in the same market and macro news, which CoinDesk’s May 2026 report linked to renewed US inflation concerns during that stretch.
The mechanism described above sits inside a large pool of assets. Cointelegraph reported that US spot bitcoin ETFs recorded a 12-day streak of inflows totaling $6.6 billion, published around the time of the July 2025 in-kind approval, and that the funds collectively held more than 1.298 million bitcoin, valued at approximately $152.1 billion, according to Bitbo data cited in the same article. The same Cointelegraph article reported that BlackRock’s iShares Ethereum ETF had surpassed $10 billion in assets in 251 days, which Cointelegraph described as the third-fastest fund to reach that milestone. These figures come from a single tracker each and are not cross-checked here against a second data provider.
This page cannot say whether the 14 May 2026 outflow of $635 million, or the more than $4 billion that left in June 2026, involved authorized participants settling in cash or in-kind. None of the sources held here disclose that split for individual redemption events after the July 2025 rule change, so it is not possible to state how much of either figure reflects bitcoin that actually moved onto the spot market versus bitcoin transferred and held by an authorized participant.
No source held here reports an issuer-by-issuer or fund-by-fund breakdown of how much creation and redemption activity has used in-kind settlement since July 2025, as opposed to cash. The rule change made in-kind settlement possible; it did not make it universal, and this evidence does not establish the mix.
The correlation figures, a coefficient of 0.68 in February 2026 falling to 0.16 by 14 May 2026, come from one CoinDesk analysis, built with SoSoValue data and, per CoinDesk’s own disclosure, assistance from an AI tool. No independent outlet held in this evidence set has replicated or checked that calculation.
The bitcoin holdings and inflow figures attributed to Cointelegraph in this piece, the $6.6 billion streak, the 1.298 million bitcoin held, the $152.1 billion valuation, and BlackRock’s Ethereum ETF reaching $10 billion in 251 days, are drawn from Bitbo data cited by a single outlet and are not cross-confirmed against a second tracker in this evidence set. The named authorized participants, Jane Street, Virtu and JPMorgan Securities, come from crypto.news alone and are not confirmed here against any fund prospectus or official authorized-participant list.
Every fact above is attributed to one of these reports. Where they disagree, the article says so.
The post Do bitcoin ETF outflows mean bitcoin actually got sold? appeared first on TheCoinrise.com.
