Investors pulled money from technology funds at a record pace last week, while a hotter-than-expected inflation print raised the prospect of another Federal Reserve rate hike – a combination that also slammed spot Bitcoin ETFs in June. U.S. tech sector funds saw $17.83 billion in net outflows for the week ending June 24, nearly reversing the prior week’s $21.5 billion in inflows. Deutsche Bank strategists reported record tech fund outflows of $9.3 billion, the largest ever recorded. Overall global equity fund inflows plunged 86% to $7.51 billion, from $55.53 billion the week before, according to LSEG Lipper data.
The sell-off was concentrated in U.S. assets: domestic equity funds shed $8.5 billion, while broad global funds attracted $14.4 billion in a rotation away from American markets. Financial and industrial sector funds also posted net outflows. Adding to the risk-off mood, the Commerce Department said May PCE inflation hit 4.1% – the highest since April 2023 – reinforcing bets on a 25-basis-point Fed rate hike later this year. Higher rates tend to punish growth stocks, especially large tech companies reliant on debt-funded expansion.
That same cautious sentiment spilled into crypto. Spot Bitcoin ETFs recorded $4.06 billion in monthly outflows in June, described as the worst month on record for the products. Analysts note that ETF demand had been one of Bitcoin’s strongest bullish narratives, but the outflows show institutional interest is not a one-way street. Large allocators can trim, rotate, or de-risk just like any other market participant. The key question now is whether this is a temporary quarter-end cleanup or the start of a deeper institutional retreat. Should ETF outflows persist into July, Bitcoin will need an alternative demand source to regain momentum.
