U.S. Spot Bitcoin ETFs Post Two Straight Days of Outflows as Newly Listed Crypto Firms Trade Below IPO Prices

Two Numbers, Both True, Pulling in Opposite Directions

On July 23, 2026, U.S. spot bitcoin exchange-traded funds lost $225.2 million in a single day. It was the first losing day after seven straight days of gains that had pulled in nearly $999 million^[1][3]. The next day, July 24, they lost $240.08 million more^[4]. Two days, $465 million gone.

Here is the other number. Since these funds launched, they have pulled in roughly $51.5 billion more than they've lost, cumulatively^[13]. BlackRock's iShares Bitcoin Trust, known as IBIT, was still positive for the year even after driving most of both bad days^[2][4][13]. Both of these numbers are accurate. They just answer different questions.

That tension is the whole story. A two-day outflow and a multi-year inflow can both be true at once, and which one you quote decides what the story sounds like. Bitcoin itself dipped as low as $64,600 during the stretch before settling near $65,403, roughly half its late-2025 peak above $126,000^[12][14].

At the same time, two crypto companies that recently went public are trading far below what they sold shares for. Gemini Space Station, founded by Tyler and Cameron Winklevoss, priced its IPO at $28 in September 2025. It now trades near $4.19^[5][8]. BitGo Holdings, a custody firm that listed in January 2026 at $18 a share, closed at $5.06 on July 23^[5][10]. Whether that slide was foreseeable, or just bad timing, is where the real argument sits.

How a Fund Full of Bitcoin Actually Moves Money

To understand why "outflow" doesn't automatically mean "investors are fleeing," you need to know how a spot bitcoin ETF works. The fund holds real bitcoin in custody. Big trading firms, called authorized participants, create new shares when demand rises and cancel them when demand falls. Creating shares means the fund buys more bitcoin. Canceling them means it sells.

So a net outflow day does mean actual bitcoin got sold. But it's one number, added up across every fund, for one day. A single large fund can swing the whole total. IBIT alone accounted for about 90% of the July 23 outflow^[2] and $212.17 million of the July 24 outflow, with Fidelity's FBTC adding $27.91 million^[4].

Issuers also point out that many of these trades aren't bets against bitcoin at all. A common institutional strategy is to buy the ETF while separately betting against bitcoin futures, pocketing the small price gap between the two. When that gap closes, the trader exits both sides. The flow data looks like someone souring on bitcoin. The trader may never have had an opinion on it either way^[13].

Bloomberg ETF analyst Eric Balchunas has made the scale argument directly: cumulative inflows near $51.5 billion dwarf two bad days, and this isn't even the first rough patch this year. A 13-session outflow streak in June shed $4.33 billion before inflows came back^[13][26][28]. Issuers earn their money as a share of assets held, not from bitcoin going up, so they have a real financial reason to frame this as routine plumbing rather than a verdict^[13].

Why a Company Can Report Billions in Revenue and Still Post a Loss

The newly public companies present a stranger puzzle. BitGo reported $3.77 billion in revenue for the first quarter of 2026, up 112.6% from a year earlier. In the same quarter, it reported a net loss of $60.7 million^[7][23]. That looks contradictory until you understand two accounting quirks.

First, most of that $3.77 billion isn't money BitGo keeps. It's the full value of digital assets the company buys and sells on behalf of clients, recorded as revenue even though BitGo only pockets a sliver as a fee. So the top-line number can double while the cash BitGo actually retains barely moves.

Second, U.S. accounting rules now require companies to revalue their crypto holdings every quarter to match the current market price. This is called mark-to-market accounting. When bitcoin's price falls, that shows up as a reported loss, even if the company never sold a single coin^[7][23]. It's a real number, but it reflects a paper swing, not necessarily a cash one.

Gemini's numbers are harder to explain away. Its 2025 net loss was $582.8 million, on operating expenses of $525.2 million, nearly four times its prior-year loss of $158.5 million^[6]. Management cut roughly 25% of its workforce and wound down international operations to control costs^[27]. Three senior executives left in February 2026, and the stock fell 13% that day^[27]. The company argues it's doing the hard, unglamorous work of cutting costs into a bad market. Critics argue the pace of those cuts, so soon after the IPO, is itself suspicious.

The Lawsuit That Turns on Timing, Not Truth

That suspicion has become a legal argument. Investors have filed a securities class action against Gemini, and the company has not conceded any wrongdoing — a filed lawsuit is an allegation, not a finding^[9]. The legal tool is Section 11 of the Securities Act of 1933, which lets IPO buyers sue if the offering paperwork left out something material. Plaintiffs don't have to prove Gemini meant to deceive anyone. That's a lower bar than fraud.

The plaintiffs' argument rests on timing. Gemini's international pullback, its 25% staff cut, and three executive departures all happened within months of a September 2025 IPO^[27]. Decisions like that don't usually get made in a few weeks, the argument goes, so the pressures behind them probably existed before the company went public and should have been disclosed.

Gemini's defense is that markets fell across the board after it listed, and no exchange controls the price of bitcoin. It isn't only Gemini: BitGo is down about 72% from its IPO price, Bullish about 71%, and eToro about 42%^[5]. Several other crypto firms, including Kraken's parent Payward, Grayscale, Consensys, and Ledger, have delayed IPOs altogether rather than list into this market^[11]. That pattern is the strongest evidence for the "bad timing, not bad faith" defense, and also the strongest evidence for critics who say the entire wave of 2025 crypto IPOs sold risk to public investors near the top.

Whose Retirement Account Is This, Anyway

The fight jumps entirely out of stock prices once it reaches Washington. A federal law called ERISA requires whoever runs a 401(k) plan to act as a prudent fiduciary for workers, most of whom don't pick their own investments. A Trump-era executive order pushed the Labor Department toward a rule that would make it easier for 401(k) plans to include crypto^[18][20].

Senators Elizabeth Warren and Bernie Sanders are fighting that rule. Their argument isn't really about whether bitcoin is a good investment — it's about who gets to choose the risk. A worker with a crypto ETF in a brokerage account made that choice. A worker whose plan added it to the default menu did not^{[15][17][19][20]}. Warren has pressed SEC Chair Paul Atkins directly on the agency's approach to crypto risk^[15][16].

Their strongest evidence is the drawdown itself: bitcoin's roughly 50% fall from its late-2025 peak, and a rout that CoinDesk reported wiped out about $2 trillion in crypto market value^[14]. They've also flagged that President Trump earned roughly $1.4 billion from crypto ventures in 2025, more than double his 2024 income, as a reason to question the policy's motives^[18].

The administration's defense is that price swings aren't proof of bad policy. Treasury yields above 5.1%, inflation fears, and a huge rotation of money into AI stocks are the more obvious causes of bitcoin's fall, they argue, not some flaw specific to crypto^[21][22]. Their comparison point is emerging-market equity funds: volatile, and nobody bans those from retirement plans either. A regulated, audited ETF, they say, is safer than the offshore exchanges savers would otherwise use^[20].

What the Headlines Left Out, in Both Directions

Coverage of the same two days split sharply by audience. CryptoSlate reported the IBIT concentration accurately but called the outflow a "reversal" after a "buying streak," language that frames it as a blip in an uptrend^[2]. BeInCrypto measured Gemini's drop from its $37 first-trade price rather than its $28 IPO price, arriving at a bigger, more dramatic 89% figure — both numbers are real, but one is more dramatic^[5].

Common Dreams called the 401(k) rule a "scheme" in its own editorial voice, not a quote, and didn't include the fiduciary-duty argument for the rule at all. DL News put Warren's phrase "Wall Street buddies" in its headline, with the attribution trailing behind it, a placement that tends to stick a critic's language in a reader's memory more than the "critics say" attached to it^[18][19]. Notably, no major right-leaning U.S. newsroom appears to have covered these specific two ETF sessions at all, leaving the "this is normal volatility" case mostly to contributor analysis and market commentary rather than staff reporting^[24].

Coverage outside the U.S. skipped the American political fight almost entirely. Outlets in Italy, South Korea, and France tied the same two days to an Asia-led semiconductor selloff and renewed tension between Washington and Tehran, treating bitcoin as one risk asset among many rather than a story about U.S. retirement policy^[1][4][21].

None of that resolves the two open questions sitting underneath all of it. A court will eventually decide whether Gemini's post-IPO struggles were foreseeable enough that they should have been disclosed^[9]. And the Labor Department will decide whether America's largest pool of retirement savings gets easier access to an asset that just lost half its value in eight months^[14][20]. Both decisions are still pending.