Bitcoin (BTC) closed June near its weakest level in almost two years after falling to around $58,000 on June 30, while spot Bitcoin ETFs extended a weeks-long run of heavy outflows.

The month, according to a Santiment market report, was less about one single crash and more about capital quietly leaving crypto for AI stocks while whales sat on their hands.

Bitcoin Struggles as ETF Outflows and Institutional Caution Weigh on Sentiment

Per Santiment’s July 2 report, June saw a growing divide between retail traders and large investors, with wallets holding less than 0.01 BTC increasing their holdings in the final two weeks of the month, while those with between 10 and 10,000 BTC reduced their exposure. This, in the firm’s opinion, suggested that large investors remain unconvinced that the market has found a bottom.

Another source of pressure came from ETFs. Since May 6, the last time there were consecutive days of inflows, spot Bitcoin ETFs have recorded about $8.9 billion in net outflows.

In June alone $4.51 billion went out of the funds, marking their worst month since launch, and Santiment argued that such heavy selling, pushing cumulative withdrawals ever closer to the psychologically significant $10 billion mark, can also reflect capitulation, with weaker hands leaving the market after a long decline.

The analytics platform also pointed to Strategy and its preferred stock as adding another layer of uncertainty after they fell well below par in June, hitting the $70s at one point and raising concerns about the company’s financial model, especially given the weakening state of BTC at the same time.

However, executive chairman Michael Saylor responded by introducing a Digital Credit Capital Framework designed to improve liquidity and support the company’s preferred stock obligations. He also defended Strategy’s recent sale of 32 BTC, saying that the world’s biggest corporate holder of Bitcoin had bought about 175,000 BTC this year and that he had not sold any of his personal stash.

The Santiment report had one theme recurring throughout: that money that might previously have flowed into crypto has instead moved into AI and semiconductor stocks. The firm’s analysts described AI equities as one of the biggest competitors for investor attention during June, leaving BTC without the institutional demand it had enjoyed earlier in the cycle.

That same point was made by HashKey researcher Tim Sun, who told CryptoPotato that capital was reallocating across risk assets rather than that investors were losing their appetite for risk altogether. According to him, there’s a chance that Bitcoin can pull that capital back if the AI trade gets overcrowded and corrects.

Market Still Found Bright Spots Despite a Difficult Month

The weakness described above was not universal, as Santiment highlighted that Hyperliquid was one of the strongest performers last month after its HYPE token climbed to new highs, supported by growing derivatives activity and new product launches.

Another that attracted attention was Lighter’s LIT, which announced tokenomics changes including buybacks, token burns, and staking incentives.

Elsewhere, Pump.fun generated substantial revenues even as it was reportedly in the market for a chief legal officer with a salary of up to $5 million, leading to speculation that it is getting ready for increased regulatory scrutiny.

Solana’s meme coin ecosystem also came back into the spotlight, with a number of influencer-backed launches, including The Black Bull (ANSEM), fronted by popular crypto figure Ansem, whose value at the time of writing had skyrocketed by nearly 88,000% in seven days per CoinGecko data.

Bitcoin itself has also shown some sign of stabilization, trading back above $61,000, but according to Santiment, June may be remembered less for the sell-off than for exposing which narratives are still attracting capital.