• The Fed left rates unchanged for the sixth straight meeting. JPowell said it’s "unlikely that the next policy move will be a rate hike."

• Block is being investigated by Federal prosecutors for alleged widespread compliance lapses relating to Cash App and its crypto team.

• Goldman Sachs and JP Morgan have both lost their global heads of ETFs in the past week.

• Wyoming Senator Cynthia Lummis released a statement critical of DOJ’s recent hostile actions toward bitcoin companies, stating “Arguments against self-custody software threaten the fundamental rights that are core to being an American.”

• Tether, the world’s largest stablecoin issuer, announcer Q1 (!) profits of $4.52B.

BTC dropped 11.5% yesterday, to a low of $56,500.

So what happened? Here’s one part of the story:

On-chain data shows us the cost-basis of different cohorts of investors, including short term versus long term holders.

As you might expect, short term holders (STH) typically have less conviction. They haven’t been around as long. So when price breaks below their cost basis, it can trigger panic selling.

This is what happened yesterday, as price broke below the STH cost basis of $59.6k.

May Day was a record breaker. You can probably guess in what direction.

🔻Fidelity

FBTC had it’s highest outflow day yet, selling off a massive 3300 BTC ($189M).

🔻Grayscale

GBTC had a big outflow day by anyone else’s standards, though not necessarily by their own. Sold off 2900 BTC ($167m).

🔻Ark

ARKB had its highest outflow day to date, sending out 1700 BTC ($98m).

🧮 Total

It was outflows across the board yesterday, and not shy ones. As you can see below, the big yellow line on the right shows the highest outflow day yet of nearly 10K BTC ($574m).

We congratulate the hodlers who stuck around for weathering what might be, for some, their first truly scary day in bitcoin. There will be plenty more where that came from! Welcome to the party.

It wasn’t all doom and gloom yesterday. A couple of big names European names turned up the 13F filings:

• Swiss bank Lombard Odier ($209B AUM) has a $1.5m piece of IBIT, and

• BNP Paribas turned up with a token stake of IBIT too.

That’s the state of bitcoin flows for this Thursday.

If you enjoyed it, we’d appreciate you sharing it with the link below. Thanks.

I’ll see you back here tomorrow.

— Julian