U.S. spot Bitcoin exchange-traded funds recorded net outflows for a second consecutive day on Friday, reversing a seven-day inflow streak, according to data from Farside Investors.
The funds lost $240 million on Friday after shedding $225 million the previous day, bringing the two-day total to $465 million. That erased nearly half of the roughly $1 billion they had taken in during the prior seven-session run. The inflow streak had peaked on July 20, when the group added $227 million in a single day, before demand cooled. BlackRock’s IBIT led the turn, accounting for just under $415 million of the two-day outflow.
Even so, the ETFs still ended last week with a net gain of almost $34 million, as the late outflows only partly offset three stronger inflow sessions earlier in the week.
A risk-off week
Tim Sun, senior researcher at HashKey, told Decrypt the sharp reversal suggested institutions were making “tactical, phased allocations near the temporary price bottom,” rather than putting on conviction-driven positions. In his view, the move reflected “a lack of a solid foundation” for a sustained uptrend.
Sun said IBIT’s outsized role mattered because it is the large, liquid vehicle institutions typically use either to add Bitcoin exposure or to hedge. Heavy redemptions there, he said, indicate that they are “actively reducing their short-term Bitcoin exposure.”
He linked the change in flows to weaker macro conditions, including renewed U.S.-Iran tensions that lifted oil and inflation expectations, as well as bond markets pricing in higher odds of a Federal Reserve rate hike later this year. The pullback, he added, was not limited to crypto. U.S. stock funds posted net outflows for a second straight week, while bond funds broke an inflow streak, which he said pointed to “a broader contraction across asset allocations.”
According to Sun, the data confirms two points: Bitcoin’s rally “lacks a firm foundation,” and capital “remains on high alert” over macro risk. If rate-hike expectations continue to rise, he warned, Bitcoin “could face further capital outflows and downside price pressure.”
Bitcoin trades at $65,300 as markets weigh macro risk and Fed odds
Bitcoin is currently changing hands at $65,300, up 1.9% on the week, based on CoinGecko data. On prediction market Myriad, owned by Decrypt parent company Dastan, users now assign a 37% chance that BTC’s next move will take it to $84,000. That figure was as low as 20% at the start of the month.
In a note published last week, Grayscale head of research Zach Pandl argued that Bitcoin’s bottom “may already be in” if the Fed refrains from further rate hikes. He also rejected the “four-year cycle” theory that points to a deeper low in September or October. The Fed’s next rate decision on July 29 will offer a near-term test of that view, with the CME FedWatch tool currently showing a 34% probability of a 25-basis-point increase.
Another market view sees room for a rebound if tensions ease
Stephen Wundke, strategy and revenue director at Algoz Technologies, also said the trend “reversed last week” after President Trump signaled renewed action against Iran and Houthi attacks near the Red Sea pushed oil back above $100. In his reading, that revived inflation and rate concerns and sent investors back into cash.
Wundke was more constructive on the next phase. Most investors, he said, see current prices as “near the bottom of the cycle,” and “the overall feeling is one of optimism.” With the pause in U.S.-Iran strikes extending into a third day, he said that if the fighting “fizzle out,” oil could stabilize near $80, inflation fears could recede, and ETF inflows, along with prices, could start climbing steadily again.
He cautioned that August is usually a “dull month for crypto,” so investors should not “expect fireworks yet.” Still, he said the industry is laying the groundwork for a move toward year-end, ideally supported by a negotiated peace in the Middle East.