ETF outflows test Bitcoin's resilience

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Stockbrokers and Investment Advisers Association (SIAA) conference wrap

From the trading floor to the blockchain: What every stockbroker needs to ask

Our Chief Commercial Officer, Paul Stonham, joined the annual Stockbrokers and Investment Advisers Association (SIAA) conference in Melbourne this week, speaking on a panel covering Digital Assets, Stablecoins and Tokenisation.

In his latest article, Paul draws on his experience at the Sydney Futures Exchange and ASX to lay out the key questions every Australian stockbroker and adviser should be asking before connecting their clients to crypto and digital asset markets. From jurisdiction and licensing through to where client funds sit.

Read the full article.

Introduction

It was a week defined by macro pressure and institutional positioning. Nearly US$2 billion exited US spot Bitcoin ETFs over seven trading days as surging Treasury yields and persistent inflation data eroded risk appetite. Bitcoin pulled back to around US$78,500 (A$107,700) while Ethereum tested critical support near US$2,100 (A$2,950).

Yet beneath the surface, the structural narrative remained constructive. The CLARITY Act moved closer to becoming law, South Carolina passed landmark pro-Bitcoin legislation, and Hyperliquid's (HYPE) real-world asset expansion delivered one of the standout performances of the year. The short-term picture is cautious; the longer-term picture continues to build.

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State of crypto

• US spot Bitcoin ETFs record nearly US$2B in outflows over seven trading days
• 30-year Treasury yield hits 5.198%, highest level since 2007, compressing risk appetite
• CLARITY Act advances with 75% passage probability following bipartisan Senate vote
• South Carolina enacts strongest pro-Bitcoin legislation in the United States
• Hyperliquid's HYPE token surges 101% year-to-date on real-world asset expansion
• US Fed holds rates as conflict-driven inflation keeps cut expectations off the table

Bitcoin ETF outflows hit US$2B as macro pressure bites

US spot Bitcoin ETFs recorded nearly US$2 billion in outflows across seven trading days, with US$648.6M withdrawn on 18 May alone, the largest single-day exodus since late January. BlackRock's IBIT led with US$448.3M in outflows, followed by ARKB at US$109.6M and FBTC at US$63.4M. The selling pressure coincided with the 10-year Treasury yield reaching 4.687% and headline inflation printing at 3.8% year-on-year, effectively erasing expectations for Fed rate cuts in 2026. While short-term flows reflect the macro environment, the underlying ETF infrastructure remains intact and institutional access to Bitcoin has not changed. Periods of outflow have historically been followed by renewed accumulation once macro conditions stabilise.

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CLARITY Act advances with 75% passage probability

Galaxy Digital's Alex Thorn raised his probability estimate for the CLARITY Act becoming law in 2026 to 75%, up from 50%, following a bipartisan 15-9 vote in the Senate Banking Committee. The bill would establish the first comprehensive regulatory framework for digital assets in the United States, categorising assets into digital commodities under CFTC oversight, investment contract assets under SEC oversight, and permitted payment stablecoins under banking regulators. For the industry, passage would represent a turning point, providing the legal certainty that institutional capital has long required. Ethereum, Solana, and XRP ecosystems are considered most likely to benefit from clearly defined regulatory pathways.

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South Carolina enacts strongest pro-Bitcoin law in the United States

Governor Henry McMaster signed Senate Bill 163 into law, introducing a total ban on central bank digital currencies, tax neutrality for crypto payments, and explicit protections for Bitcoin mining and self-custody. The legislation prohibits state agencies from accepting or testing federal CBDCs and shields proof-of-work mining operations from discriminatory zoning rules. A companion bill, H.4256, would allow the state treasurer to allocate up to 10% of unallocated funds into Bitcoin. South Carolina joins a growing list of US states moving to codify digital asset rights at the legislative level, adding regulatory momentum to a year already marked by significant policy progress.

Hyperliquid surges 101% year-to-date on real-world asset expansion

Hyperliquid's HYPE token reached US$51.67, up 101% year-to-date, driven by meaningful revenue diversification beyond crypto perpetuals. The platform generated US$255M in revenue year-to-date, with 97% accruing to HYPE holders via buybacks, and captured 43% of all on-chain fees across tracked platforms. Real-world asset trading reached US$2.6B in open interest, with nearly half of volume coming from non-crypto assets including S&P 500 futures, pre-IPO stocks, and commodities. Bitwise and 21Shares have filed HYPE ETF applications, attracting US$22.3M in early inflows. The performance underscores growing appetite for on-chain exposure to traditional asset classes.

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Tether consolidates position in Twenty One Capital

Tether International acquired SoftBank's entire 26% stake in Twenty One Capital, a Bitcoin treasury company holding 43,514 BTC valued at approximately US$3.4B. The acquisition consolidates Tether's control over the second-largest public Bitcoin holder after Strategy, and follows a proposal to merge Twenty One Capital with Strike and Elektron Energy. The combined entity would create a vertically integrated Bitcoin enterprise spanning treasury management, mining, lending, and financial services. The move reflects a broader trend of large crypto-native entities building diversified Bitcoin-focused businesses rather than simply accumulating spot exposure.

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Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

InvestorDaily: Australia moves toward tokenised assets within months

Speaking to InvestorDaily, executives from BTC Markets said the company is moving towards building a “mini ASX for digital assets”, with institutional demand for tokenised products accelerating as regulators, brokers and issuers gain confidence in the sector.

Bloomberg: Bitcoin at Two-Week Low as Crypto Liquidations Top $800 Million

“Bitcoin’s pullback is a macro story,” said Rachael Lucas, an analyst at BTC Markets. “Risk appetite has repriced, and Bitcoin is moving with it.”

Financial Standard: Tokenisation could inject $24bn annually: Project Acacia

"The report explicitly identifies 'challenges to scaling' and the need for deeper regulatory and industry coordination. That's an honest assessment, and an important one," BTC Markets chief commercial officer Paul Stonham said.

Announcements

BTC Markets named finalist at the Finnies 2026

We’re proud to share that BTC Markets has been named a finalist for Best Workplace Diversity at the Finnies 2026 by FinTech Australia. Congratulations to Anastasia Varlamova, our People and Culture Manager, who is shortlisted for Emerging Fintech Leader of the Year (Under 35).

Learn more

BTC Markets joins DECON 2026 as sponsor

We’re excited to support DECON 2026 and contribute to discussions on the future of digital assets in Australia. CEO Lucas Dobbins and Chief Commercial Officer Paul Stonham will join panels focused on institutional market infrastructure, capital flows and tokenised real-world assets.

Register here

The week ahead: Economic events

Thursday, May 21st

• United States Fed Funds Interest Rate, Building Permits, Housing Starts
• Japan Balance of Trade
• Germany Manufacturing PMI
• United Kingdom Manufacturing PMI, Services PMI

Friday, May 22nd

• Japan Inflation Rate
• Germany GfK Consumer Climate
• United Kingdom Retail Sales MoM
• Germany Ifo Business Climate Index

Source: Trading Economics

Market reflections

• United States: Fed stays cautious as rate cut expectations continue to fade
• Europe: EU strengthens investment screening amid economic security concerns
• China: Beijing signals trade easing following Trump-Xi discussions
• Japan: Strong GDP growth tempered by rising geopolitical risks
• Australia: Consumer confidence improves slightly but remains under pressure

Markets in the United States adjusted expectations this week after a Reuters poll showed economists now anticipate the Federal Reserve will keep interest rates unchanged through the rest of 2026. While conflict-driven energy inflation remains a concern, economists largely continue to view the pressure as temporary. Traders are increasingly positioning for rates to stay elevated for longer, keeping macroeconomic data and oil price movements firmly in focus.

Elsewhere in Europe, policymakers moved ahead with tougher foreign investment screening rules designed to protect strategic industries and critical infrastructure. The decision reflects broader concerns around economic security and geopolitical resilience as governments seek greater oversight of overseas capital entering sensitive sectors. Investors are watching closely for any impact on long-term business confidence and regional investment flows.

Fresh signals from China pointed to a more constructive tone in trade discussions with the United States following talks between President Xi Jinping and U.S. President Donald Trump. Officials indicated potential tariff reductions and progress on agricultural market access, helping improve broader market sentiment after months of uncertainty surrounding global trade conditions.

Economic data out of Japan surprised to the upside after first-quarter GDP growth came in stronger than expected. However, optimism was tempered by growing concerns over rising energy prices and geopolitical instability in the Middle East. For Japan’s import-reliant economy, sustained increases in oil prices could create additional inflationary pressure and weigh on domestic consumption later this year.

Meanwhile, sentiment across Australia improved modestly in May, though households remain cautious amid ongoing cost-of-living pressures and elevated borrowing costs. While inflation continues to ease gradually, confidence levels remain subdued relative to historical norms. The latest data reinforced expectations that the Reserve Bank of Australia is likely to maintain a measured policy stance in the near term.

Policy expectations, geopolitical developments and energy markets continue driving broader market sentiment globally. Investors remain highly sensitive to shifts in inflation expectations and central bank positioning as uncertainty across major economies persists.

Final thoughts 

This week was a reminder that crypto markets do not operate in isolation. Surging Treasury yields, sticky inflation, and geopolitical uncertainty created genuine headwinds, and the ETF outflow data reflected that in real time. Bitcoin's pullback to US$785000 and Ethereum's test of US$2,100 are worth monitoring closely as we head into the week ahead.

That said, the structural picture has not deteriorated. Legislative progress on the CLARITY Act, South Carolina's landmark Bitcoin law, and Tether's consolidation of Twenty One Capital all point to an industry continuing to build despite short-term market noise.

For the week ahead, watch US macroeconomic data releases and Treasury yield movements for direction on risk appetite. Any softening in inflation expectations could quickly reverse ETF flow trends. On the regulatory front, further CLARITY Act developments remain the most significant catalyst for broader institutional positioning.

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Online safety: How to stay safe in online relationships

Online platforms such as dating apps, social media, and gaming communities make it easy to meet new people. While many connections are genuine, some individuals build relationships with the intention of gaining access to your money or personal information.

They may offer frequent attention, encourage you to move conversations to private apps, or share stories designed to create empathy or urgency. Over time, they may ask for financial support, suggest investment opportunities, or request personal images that could be misused later.

What to watch out for

• A relationship that develops unusually quickly or feels too perfect.
• Frequent excuses to avoid video calls or in-person meetings.
• Requests to move the conversation to private or encrypted messaging apps.
• Suggestions to send cryptocurrency, open accounts, or transfer funds.
• Discouraging you from speaking with friends or family about the relationship.
• Profiles with minimal information, inconsistencies, or reused photos.

How to stay safe

• Avoid sending money or cryptocurrency to anyone you have not met in person.
• Be cautious of investment ideas or opportunities shared by online contacts.
• Use reverse image search to check whether profile photos appear elsewhere.
• Speak with someone you trust if something feels unusual or uncomfortable.

Protect yourself and others. Learn more at scamwatch.gov.au.

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Disclaimer: The information provided on this page is issued by BTC Markets Pty Ltd (BTC Markets, we, us, our). The information is general only and is not intended to constitute an opinion or recommendation with respect to its contents. Past performance is not a reliable indicator of future performance. Any reference to past performance is intended to be for general illustrative purposes only. The information cannot be relied upon for any purposes and is not intended to be a substitute for professional advice.

The information does not purport to be complete, accurate or contain all of the information that a person may require to make a decision. It may also contain forward looking statements, which are subject to known and unknown risks, uncertainties, and other factors. We recommend you obtain professional advice before making any decision with respect to the matters discussed in this document. To the maximum extent permitted by law, BTC Markets will have no liability for any loss or liability of any kind: (i) arising in respect of the information contained (or not contained) on this page; or (ii) arising from a person relying on any information or statement contained on this page. The information provided is only intended for recipients in Australia. This information cannot be reproduced without our prior written permission.