U.S. Bitcoin ETFs See Net Outflows After Sustained Inflows

Spot Bitcoin exchange-traded funds (ETFs) in the United States recorded net outflows on July 1, ending a robust 15-day streak of inflows totaling nearly $4.73 billion since mid-June. The combined net outflow of $342.25 million came as investors adopted a more cautious stance, positioning ahead of what has historically been a slower third quarter for Bitcoin trading.

Key Fund Withdrawals and Market Movement

Fidelity's FBTC led the outflows with $172.73 million redeemed, while Grayscale’s GBTC also saw significant redemptions of $119.51 million. Other funds such as ARK 21Shares’ ARKB and Bitwise’s BITB contributed with outflows of $27.03 million and $22.98 million, respectively. Notably, BlackRock’s IBIT ETF recorded no net movement on the same day.

In contrast, spot Ethereum ETFs continued to attract inflows for the third consecutive day, with funds adding $40.68 million collectively. BlackRock’s ETHA accounted for $54.84 million of the inflows, supported by Grayscale’s ETHE with $9.96 million in additions, partially offset by Fidelity’s FETH outflows of $24.11 million.

Legislative Impact and Market Reaction

The reversal in Bitcoin ETF flows coincided with the U.S. Senate passing a major $3.3 trillion spending bill without any crypto-related provisions, leading to disappointment within portions of the digital asset community. Passed narrowly with a 51–50 vote, the legislation omitted any references to Bitcoin, crypto mining, or staking despite lobbying efforts.

Following the legislation, the overall crypto market capitalization dropped approximately 2.3% to an intraday low of $3.36 trillion. Bitcoin's price declined nearly 2% to around $105,000 before recovering slightly above $107,000. Market data indicated $242.6 million in crypto liquidations on July 1, predominantly from long positions, suggesting profit-taking and risk management tactics from bullish traders.

Historically, Bitcoin's third-quarter performance has been the weakest among yearly quarters, averaging a modest 5.47% gain since 2013. This underperformance may contribute to investors' cautious repositioning as they prepare for seasonal market fluctuations. Despite recent volatility, Bitcoin remains up almost 40% from its year-to-date lows recorded in early April.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.