Bitcoin ETF Inflows Plunge 65% to $769M Amid Fed and Fiscal Uncertainty
US Bitcoin ETFs saw a 65% decline in weekly net inflows, dropping from $2.22 billion to $769.6 million according to SoSoValue.
Quick overview
- US Bitcoin ETFs experienced a significant 65% decline in weekly net inflows, dropping from $2.22 billion to $769.6 million due to changing macro and political signals.
- Despite strong initial inflows at the beginning of the week, outflows reversed the trend midweek, with the largest daily inflow since May occurring on Thursday.
- The stronger-than-expected June jobs report dashed hopes for a rate cut, leading investors to pull back from high-risk assets like Bitcoin.
- The Senate's passage of Trump's budget bill, lacking crypto-friendly provisions, further dampened market sentiment, although Bitcoin has shown some resilience.
US Bitcoin ETFs saw a 65% decline in weekly net inflows, dropping from $2.22 billion to $769.6 million according to SoSoValue. This big pullback was due to reduced investor appetite as macro and political signals changed.
Inflows started strong on Monday with $102.14 million but reversed on Tuesday with $342.25 million outflows. The trend flipped midweek as Wednesday and Thursday saw inflows of $407.78 million and $601.94 million respectively, the latter being the largest daily inflow since May. US markets were closed Friday for Independence Day.
Top ETFs by Weekly Inflows:
- IBIT by BlackRock: $336.8 million
- FBTC by Fidelity: $248.4 million
- ARKB by ARK 21Shares: $160 million
- Other issuers: $109.2 million
- GBTC (legacy) by Grayscale: -$84.9 million (outflows)
The slowdown is seen as a combination of profit taking at Bitcoin’s all time high around $111,960 and risk aversion before the holiday weekend.
Rate Cut Hopes Dashed by Strong Jobs Report
Macroeconomic signals added to the crypto market’s caution. The June US jobs report came in stronger than expected with nonfarm payrolls rising 147,000 vs the consensus estimate of 110,000.
This crushed rate cut hopes and many investors are recalibrating their portfolios and pulling back from high risk assets like Bitcoin.
Without the rate cut tailwind, Bitcoin’s appeal as an inflation hedge and speculative asset faces short term headwinds. Analysts say any clear dovish shift from the Fed will likely bring back inflows into crypto ETFs.
Trump’s Budget Bill Disappoints Crypto
Further weighing on sentiment was the Senate passage of President Trump’s comprehensive tax and spending bill, aka the “One Big Beautiful Bill”. Despite having wide ranging fiscal reforms, it did not include crypto friendly tax provisions proposed by pro crypto lawmakers.
These provisions had promised relief for staking and mining and clarity on crypto taxation – expectations that are now unmet.Bitcoin dropped to $105,000 on July 2 after the bill passed but rebounded to over $110,000 after Trump announced a new trade deal with an ASEAN nation.
As of writing Bitcoin is at $109,000, 2.5% off the all time high.
Despite near term volatility Standard Chartered is still forecasting $135,000 by Q3 and $200,000 by year end due to strong institutional demand and low exchange supply.
Other firms like Bernstein and BitMEX’s Arthur Hayes are projecting even higher targets up to $250,000 if ETF inflows and global liquidity is robust.
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