In mid to late May 2026, it was not a single day of sharp decline that reversed the sentiment of this round of the crypto bull market, but a string of cold subscription and redemption data: after a period of continuous net inflow, the US spot Bitcoin ETF suddenly turned around, recording large net outflows for two consecutive weeks—by the week ending May 22, funds had flowed out approximately $1.26 billion, followed by an additional outflow of around $1.42 billion in the week around the end of May (according to a single source). As the main channel for institutional funds, ETFs began to collectively loosen their grip, causing Bitcoin’s price to fall back from its high, dropping to around $72,500 at one point during the session. Although there was buying interest around $70,000, it was described as insufficient to reverse the overall downtrend. The macro narrative also took a turn at the same time: JPMorgan analysts pointed out in late May that signs of easing in the Middle East situation and weakening inflation concerns have lessened the urgency of the 'devaluation trade' that had previously driven Bitcoin and gold up, with safe-haven assets retreating against the backdrop of ETF outflows. At almost the same moment that macro funds chose to leave the market, a Nasdaq-listed company heavily invested in Bitcoin made the opposite choice: Nakamoto Inc., which holds over 5,000 Bitcoins on its balance sheet, disclosed that its Chairman and CEO David Bailey had purchased an additional 191,448 shares of company common stock in the open market at an average price of approximately $5.19 from May 26 to 28, totaling nearly $1 million. Subsequently, the company defined this move as a vote of confidence in its strategy, Bitcoin assets, and long-term growth prospects. This series of highly overlapping actions split the May market into two layers: one layer is the macro-level cooling of safe-haven sentiment and the retreat of the 'devaluation trade', which led to ETF redemptions and price pressure; the other layer is the micro-level management team increasing their positions against the trend, projecting long-term bullish signals to the market. Under the divergence of fund flows and behavioral entities, Bitcoin is being forced to be repriced from a 'short-term hedging tool' into a more complex risk-appetite asset.
ETF funds turn around: Safe-haven trades are retreating
From a timing perspective, the reversal occurred almost simultaneously: by the week ending May 22, the US spot Bitcoin ETF recorded about $1.26 billion in net outflows, with an additional net outflow of around $1.42 billion the following week, marking two consecutive weeks of 'blood loss' and indicating that the risk-averse and devaluation funds that had pushed prices higher since the beginning of the year began to turn around collectively. In a report from late May, JPMorgan analyst Nikolaos Panigirtzoglou provided a macro explanation—signs of easing in the Middle East situation and decreasing inflation worries indicated that the 'devaluation trade' driving Bitcoin and gold was no longer urgent, leading both the geopolitical risk premium and inflation risk premium to decline, thus reducing Bitcoin's marginal appeal as a 'digital safe-haven asset'.
The key point here is that this change in sentiment is not merely at the expectation level but has transformed into quantifiable passive selling along the ETF channel. ETFs are the main battlefield for institutional funds entering Bitcoin this round: previously, they were acquiring Bitcoin spot through subscriptions, pushing prices higher; when funds shifted from net inflow to continuous net redemption, the product provider needed to sell corresponding Bitcoin spot to meet exit demand, transmitting the selling pressure further to the futures and spot order books through market makers and arbitrageurs. In mid to late May, Bitcoin once retreated to around $72,500, and although buying interest appeared near $70,000, in the face of two consecutive weeks of ETF redemptions totaling over $2 billion, these buy orders were more of a local buffer, insufficient to rewrite the trend. The directional change of ETF funds from 'continuous inflow' to 'continuous clearing' is the real visible hand pressing down on prices.
On-chain buying pressure holds at seventy thousand, but cannot stop the torrent of selling
When prices retreated to around $72,500, the narrative on the trading floor shifted from 'chasing highs' to 'can it hold at seventy thousand'. On-chain and over-the-counter spot buy orders were progressively placed around the $70,000 mark, with small amounts entering from cold wallets and OTC market makers lowering prices to quietly undertake, attempting to build a new 'defensive line' in this area. However, the defensive line was not facing ordinary retail investors taking profits but rather two weeks of simultaneous ETF redemptions at the billion-dollar level, coupled with some large funds choosing to systematically reduce their positions based on macro expectations. These outflows returned to the spot and futures order books through the market-making and arbitrage chains, creating ongoing passive selling pressure. In such a contrasting volume, the buying pressure around seventy thousand seemed more like pulling down the angle of decline from a 'straight drop' to a 'gentle slope', yet insufficient to return the trend from downward to upward, making it naturally easier for prices to exhibit weaker or choppy movements within the high range in the short term.
On the macro level, the explanation provided by JPMorgan analysts in late May noted that easing Middle Eastern risks and decreasing inflation concerns have prompted the 'devaluation trade' that had previously supported Bitcoin and gold to begin retreating; meanwhile, in the on-chain capital structure, long-term holders capable of absorbing selling pressure typically only significantly increase their positions after more pronounced pullbacks. Given that current prices remain close to historical highs, there is no reason for 'faith-based' buyers to unconditionally step in at the moment ETFs and macro funds are withdrawing, resulting in a market lacking a deep-pocket player willing to 'absorb all chips'. Historical experience shows that when Bitcoin is under pressure and safe-haven demands decrease, funds often prioritize reducing positions in more volatile varieties, with deleveraging forces primarily squeezing high beta assets and high-leverage derivatives. After long positions are passively liquidated, risk capital tends to prefer to return to US dollars and dollar-denominated assets in the short term. Until long-term buying pressure truly acts, the seventy thousand mark appears more like a water level marker that may be re-tested at any time, rather than a firmly established bottom.
Nakamoto bottom-fishes its own stock: betting on Bitcoin with company leverage
At the same time that leverage was passively contracting and ETF funds were withdrawing in bulk, Nakamoto Inc. provided a completely opposite balance sheet response. As a Nasdaq-listed company holding over 5,000 Bitcoins on its books (stock code NAKA), its stock price is already viewed by the market as a form of 'equity-based Bitcoin balance sheet': Bitcoin represents a high weight in the company's assets, causing NAKA's stock price to show high beta elasticity in relation to Bitcoin price changes. Essentially, buying this stock means broadening exposure to Bitcoin through the company’s shell. Because of this, during the phase where ETFs were used for deleveraging and compressing risks, the movements of Nakamoto and other 'Bitcoin amplifiers' are often seen as the most sensitive segment of sentiment.
Precisely at this peak of the deleveraging cycle, the company’s Chairman and CEO David Bailey chose to stand on the opposite side of the fund flows. From May 26 to 28, 2026, he purchased 191,448 shares of company common stock at an average price of about $5.19 in the open market, totaling nearly $1 million. For a manager already deeply tied to the company’s destiny, this transaction is not an ordinary professional action but rather an increase of a highly leveraged Bitcoin long position with personal assets: when the underlying asset is Bitcoin and the carrier is a high beta company's equity, a CEO's increase in holdings effectively multiplies their risk exposure again by the leverage the company provides. In subsequent announcements, Nakamoto simply defined this operation as 'a demonstration of confidence in the company's strategy, Bitcoin assets, and long-term growth prospects'. Numerically, we see a strong contrast between the tens of billions of dollars in net redemptions of ETFs over two weeks and a CEO's counter-cyclical purchase of less than $1 million; narratively, it is an unexpectedly inserted micro narrative where management bets real money on Bitcoin’s future amidst a macro-level retreat of funds and passive leverage contraction, providing the market with a reflexive signal that has yet to be validated by price but is worth ongoing tracking.
ETF withdrawals and management mounts: short-term redemptions versus long-term hoarding
The price and capital trajectory in mid to late May resemble two types of capital pulling opposite curves on the same asset. On one side are tactical funds represented by the US spot Bitcoin ETF: as the Middle Eastern situation eases and inflation fears cool, the 'devaluation trade' also recedes. The ETF saw approximately $1.26 billion in net outflows by the week ending May 22, followed by about $1.42 billion in the next week, causing Bitcoin to fall from its highs to around $72,500. While there was buying interest near $70,000, it was insufficient to counter the passive selling pressure from the redemptions. This type of capital is highly sensitive to macro factors, entering and exiting on a weekly basis, and has taken the direction of spot and futures pricing in the short term, effectively handing Bitcoin’s marginal pricing power to ETF holders who 'eat based on macro sentiment'.
On the other side is the long-term strategic capital decision represented by balance sheets. From May 26 to 28, during which ETFs continued to flow out, Nakamoto Inc.’s CEO, holding over 5,000 Bitcoins, increased his holdings of company stock in the secondary market at an average price of about $5.19, with nearly $1 million in position not changing the tens of billions of dollars of net outflow over two weeks, but it did alter the ownership of the shares—the ETF redemptions put Bitcoin back into the market from high-liquidity fund products, while the company's repurchase locked some of that exposure back into the balance sheet, meaning that when prices drop in the future, this portion of stock is less likely to be sold compared to passive redemption. The structure of companies like Nakamoto, which combines 'company equity + Bitcoin reserves', offers traditional equity investors a route to bypass ETFs for holding Bitcoin: when ETF redemptions drive prices down, long-term buyers choose to amplify their sensitivity to Bitcoin indirectly by buying equity in such companies, resulting in supply consolidating increasingly into the hands of 'strong hands' that can withstand volatility more. For the entire crypto market, this mismatch of 'short-term redemptions vs. long-term hoarding' suggests that future cycles may become more sharp: when macro sentiments warm up, the upward phase will have a steeper slope due to diminishing floating capital and long-term funds levering up, while when sentiments turn cold, the passive selling pressure dominated by ETFs will similarly lead to a steeper and quicker downward phase before long-term buying pressure re-emerges.
From a symbol of safety to a balance sheet, the Bitcoin story is morphing
In mid to late May, as the Middle Eastern situation eased and inflation concerns waned—cited directly by JPMorgan as the key backdrop for the retreat of the 'devaluation trade'—Bitcoin was pushed back from its position as the macro protagonist against the backdrop of 'safe-haven and currency devaluation hedging': within two weeks, spot ETFs recorded net outflows of approximately $1.26 billion and $1.42 billion, and Bitcoin’s price fell to around $72,500. While there was some buying interest near $70,000, it was insufficient to counter the passive redemptions. Risk appetite initially contracted at the Bitcoin level, which then spread to higher-risk crypto assets, amplifying the pricing pressure accordingly. In contrast, Nakamoto Inc. holds over 5,000 Bitcoins on its balance sheet, and during this round of continuous ETF outflows and price pressure from May 26 to 28, its CEO increased his holdings of company stock at an average price of about $5.19, defining this as a vote of confidence in the company's strategy and long-term prospects for its Bitcoin assets. This choice rewrites Bitcoin from a 'macro hedging instrument' to a 'long-term strategic position shared by the company and its shareholders'. Who will lead the direction of prices and funds moving forward depends on three variables: whether ETF fund flows can stabilize or even reverse after experiencing a peak outflow, whether buying pressure around $70,000 can hold up against a new round of selling pressure, and whether more listed companies will follow Nakamoto in raising Bitcoin exposure on their balance sheets and equity levels. This will determine whether Bitcoin trends more like a high-beta macro trade or gradually locks into a long-term allocation framework among companies and capital markets.
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