Bitcoin ETFs Shed $225 Million as Treasury’s Biggest Buyers Retreat

Spot Bitcoin ETFs shed $225.18 million on Friday, snapping a seven day run that had pulled in nearly $1 billion. The same session, the 10-year Treasury yield touched 4.71%, its highest mark in about 18 months. Wall Street’s easy explanation is that scared money left crypto for the safety of government bonds.

That story leaves out the two institutions that actually move the Treasury market. Japan has sold US government debt to defend its currency at least twice already this year. China has spent 20 straight months buying gold instead of adding Treasuries. Both dwarf a $225 million ETF wobble, and both help explain why the “safe haven” everyone is rotating into is behaving strangely itself.

A Seven Day Streak Ends at $225 Million

US-listed spot Bitcoin ETFs recorded $225.18 million in net redemptions in the latest session, according to Farside Investors data cited for July 24. The move ended a seven day stretch of inflows worth close to $1 billion, a run that had helped push bitcoin back toward almost $67,000.

BlackRock’s IBIT accounted for the bulk of the damage, with a single fund shedding $202.5 million in one session. Bitwise’s BITB and Fidelity’s FBTC also bled money, along with several smaller funds. Morgan Stanley’s MSBT was the lone holdout, adding $5 million.

Bitcoin’s price has dropped more than 3% over two days, pressured by the US-Iran conflict and by delays in passing the CLARITY Act before Congress leaves for its August recess. That bill would set clearer federal rules for digital asset markets, and stalled progress has left traders with one less reason to hold risk.

Ten Year Yields Hit Their Highest Mark Since January 2025

The bond side of this story is louder than the crypto side. The 10-year Treasury yield climbed to 4.71% on Thursday, its fourth straight day of gains and its highest level since January 2025, according to data from a rate that has gained more than 30 basis points in four weeks. Longer-dated debt moved even further. Economist Peter Schiff said the 30-year yield jumped to 5.18%, a level not seen since April 2006.

Several forces are pushing yields at once.

• Oil prices have surged nearly 31% above pre-conflict levels as the US-Iran war drags on, feeding inflation worries.
• Rate hike odds for the Fed’s September meeting have climbed above 78%, up from 61% a day earlier, on bets that oil-driven inflation forces the Fed’s hand.
• New tariffs from the Trump administration have added fresh strain to trade relationships with major partners.
• Daily debt growth of roughly $7.71 billion keeps adding fresh supply to a bond market already digesting higher rates.

Higher yields raise the government’s own financing costs, which can force more borrowing, which pressures yields further. That loop is exactly what has investors nervous, and it is also why the rotation out of bitcoin into “safe” Treasuries misses half the picture.

Japan Has Quietly Sold Treasuries Before

BIT, the crypto research firm formerly known as Matrixport, warned that “Japan may gradually sell U.S. Treasuries to support the rapidly depreciating yen.” That is not a hypothetical. Japan has already done it, more than once, in 2026.

Why Would Japan Sell the Debt It Holds the Most Of?

Japan is the largest foreign holder of US government debt, and its Ministry of Finance draws on that pile whenever the yen weakens too fast. Selling dollars means first raising dollars, and Treasuries are the easiest asset to convert. Each burst of yen intervention has coincided with a matching drop in Japan’s reported foreign securities holdings.

Federal Reserve custody data showed Treasury holdings for foreign official accounts falling by $8.7 billion in an early-May window, a decline that lined up with an estimated $54.7 billion in yen-buying by Japan’s finance ministry over the same stretch. A month later, Tokyo’s foreign reserve data showed foreign securities holdings dropping $75.6 billion in May alone, matching a record ¥11.73 trillion, or $73.4 billion, in intervention that the ministry confirmed for the month through late May.

• What we know: Japan’s reported foreign securities holdings have twice fallen in step with confirmed, record-sized currency intervention this year, and Fed custody data shows matching drops in foreign-held Treasuries.
• What’s unconfirmed: Japan’s finance ministry has not officially stated that Treasury sales specifically funded either intervention, and authorities typically avoid confirming the mechanics of an intervention at all.

National Australia Bank strategist Rodrigo Catril has described the pattern as sporadic rather than routine. If it becomes routine, though, it adds a second seller to a market that is already absorbing more supply from Washington than it has in years.

Beijing Keeps Choosing Gold Over Bonds

China is telling a similar story with different numbers. The People’s Bank of China added 14.93 tonnes of gold in June, its largest single-month purchase since 2023 and its 20th consecutive month of buying, according to data from the State Administration of Foreign Exchange. That streak has pushed the central bank’s reserves to roughly 2,346 tonnes, or about 75.44 million troy ounces.

China’s foreign exchange reserves overall totaled $3.4163 trillion at the end of June, down $26 billion from May. Gold still makes up less than 10% of that stockpile, far below the roughly 70% weighting held by the United States, so Beijing has plenty of room to keep buying. Meanwhile its Treasury holdings have followed a multi-year downward trend, with China now ranking behind Japan and the UK among foreign holders rather than at the top, where it once sat.

Neither central bank is dumping Treasuries overnight. Both are adjusting at the margins, for their own currency and reserve reasons that have nothing to do with bitcoin. But those margins run into the hundreds of billions of dollars, dwarfing a $225 million ETF swing, and they land in the same bond market that crypto outflows are supposedly making safer.

The Same Yield, a Very Different Debt Load

Schiff put the historical comparison in blunt terms.

The U.S. can’t afford these rates, let alone the much higher rates we’ll soon be forced to pay.

Peter Schiff, the economist and longtime bitcoin critic, made that warning after noting that the last time the 30-year yield sat near 5.18%, in April 2006, the national debt stood at $8.35 trillion. He put today’s figure at $39.6 trillion, or roughly a fivefold increase.

Official figures track closely with that framing. The Senate’s Joint Economic Committee’s Monthly Debt Update put gross national debt at $39.39 trillion as of July 6, up $2.81 trillion over the past year and rising by about $7.71 billion every single day. At that pace the committee projects the US crossing $40 trillion around October. The 10-year constant maturity series tracked by the St. Louis Fed shows just how much ground yields have covered to get back near these levels.

Interest costs are already climbing with the debt. The average interest rate on marketable federal debt reached 3.411% in June, up from 3.375% a year earlier, and the Congressional Budget Office expects net interest payments to eat up close to 14% of federal outlays this fiscal year. A bigger debt load paying a higher rate is precisely why Schiff argues the government has less room to absorb yields like these than it did in 2006.

The Fed’s Next Move Could Raise the Stakes Further

Markets are now pricing more than a 33% chance the Fed hikes rates at next week’s meeting, a scenario that seemed remote before oil prices took off. That is an unusual position for a central bank that spent 2024 and much of 2025 cutting. A hike driven by oil-fed inflation, rather than an overheating economy, would push short-term yields higher just as long-term yields are already stretched.

US stocks have felt the same squeeze, slipping even as a record $7.78 trillion sits parked in cash on the sidelines, money that could just as easily flow into bonds as back into equities or crypto. Trump’s tariff package, unveiled after the administration rebuilt its levies following a court defeat, adds another layer of uncertainty for trade partners already watching bond yields climb.

This does not guarantee bitcoin ETFs keep bleeding. The seven day run that just ended had followed weeks in which BlackRock’s chief executive turned newly bullish on the asset, and flows have swung both directions all year. What is different this time is the company bitcoin is keeping. It is now competing for capital against a Treasury market where the two largest foreign stakeholders are both, for their own reasons, stepping back.

Frequently Asked Questions

What is the CLARITY Act, and why does its delay matter for crypto markets?

The CLARITY Act is legislation meant to set clearer federal rules for digital asset markets, dividing oversight between regulators. Its stalled progress before Congress’s August recess has removed a catalyst traders were counting on, adding to bitcoin’s recent price pressure alongside the Iran war and the ETF outflow.

Does a Bitcoin ETF outflow always predict a lower Bitcoin price?

Not reliably on a single day. ETF flow data measures authorized participant creation and redemption activity, and analysts have noted the link between daily flows and same-day price moves is a loose statistical correlation rather than a guarantee. Multi-day streaks, like the one that just ended, tend to matter more than any one session.

Why do rising Treasury yields pull money out of Bitcoin?

Higher yields make government debt a more competitive place to park cash, since investors can earn a guaranteed return instead of taking on bitcoin’s volatility. When yields jump quickly, as they did this week, some institutional allocators shift weighting toward bonds until the picture stabilizes.

What is the difference between the 10-year and 30-year Treasury yield moves?

The 10-year yield, at 4.71%, reflects medium-term borrowing costs and is the benchmark most tied to mortgages and corporate debt. The 30-year yield, which Schiff put at 5.18%, reflects the government’s longest-term borrowing costs and is more sensitive to worries about debt sustainability decades out.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Bitcoin, exchange-traded funds and Treasury securities all carry risk, and figures cited are accurate as of publication on July 24, 2026. Readers should consult a licensed financial professional before making investment decisions.