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▲ Bitcoin (BTC) ETF ©CoinReaders
The Bitcoin (BTC) spot ETF saw a swift reversal in just one day, shifting from $233.1 million in net inflows to $265.4 million in net outflows, revealing a lack of directional conviction among institutional investors. The total net inflow for July also remained at its lowest level since the product's launch, leading to evaluations that it falls short of the market's anticipated 'recovery in institutional demand'.
According to the investment media outlet TradingNews on August 3 (local time), US Bitcoin spot ETFs experienced a net outflow of $265.4 million on July 31. BlackRock's iShares Bitcoin Trust (IBIT) saw $122.7 million exit, while Fidelity's FBTC and Grayscale's GBTC lost $54.8 million and $52.6 million, respectively. No major products recorded net inflows. Compared to the previous day's $233.1 million inflow, the fund flow reversed by $498.5 million within 24 hours.
The weekly net outflow for July 27-31 was $61.53 million, ending a three-week streak of net inflows. However, IBIT still recorded $86.9 million in net inflows on a weekly basis despite large redemptions on Friday. In contrast, FBTC saw an outflow of $85.2 million, GBTC $52.6 million, and Ark 21Shares ARKB $30.6 million. During the same period, Ethereum (ETH) spot ETFs attracted $27.42 million, Solana (SOL) spot ETFs approximately $2.82 million, and XRP (Ripple) spot ETFs $14.86 million, indicating a shift of funds within the virtual asset market to products other than Bitcoin.
The net inflow for Bitcoin spot ETFs in July was tallied at $172.4 million. Although it turned to a monthly net inflow after consecutive outflows of $2.43 billion in May and $4.52 billion in June, it marks the smallest monthly inflow since the product's launch in January 2024. This only recovers 2.5% of the $6.95 billion that exited over two months. The proportion of trading days with net outflows this year also reached 54%, meaning Bitcoin spot ETFs have entered a phase where funds are exiting on more than half of trading days for the first time since their launch.
IBIT, the largest product in the market, held approximately 739,066 BTC as of July 31, with a net asset value of $46.52 billion. Compared to the cumulative net inflow of $60.48 billion since its launch, the current net asset value is about $14 billion less. This reflects unrealized losses due to the decline in Bitcoin's price. The total net assets for all spot ETFs were $76.3 billion, and cumulative net inflows were $51.3 billion. The media also highlighted the concentration risk of custody, noting that approximately 80% of the total ETF underlying assets are held in Coinbase Custody.
The media analyzed that a significant portion of ETF inflows was not capital betting on price appreciation but rather delta-neutral basis trades, involving buying spot ETFs and selling CME futures. As the Bitcoin 3-month futures basis yield fell below the 2-year US Treasury yield of 4.25%, arbitrage funds exited, and CME open interest and spot trading volumes retreated to multi-year lows. The media's August ETF fund flow forecast ranges from a $500 million net outflow to a $500 million net inflow. To achieve fund recovery, it diagnosed the need for net inflows exceeding $300 million for three consecutive weeks, IBIT's net assets recovering to $48 billion, and the Clarity Act, a US cryptocurrency market structure bill, being introduced in the Senate.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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