Bitcoin ETFs end 10-day outflow as weak activity data lifts market sentiment
US spot Bitcoin exchange-traded funds recorded $221.7 million in inflows, ending a 10-day retreat as soft US economic data and easing Federal Reserve rate concerns helped Bitcoin recover from this week’s decline.
Summary
- US spot Bitcoin ETFs recorded $221.7 million in inflows, ending a 10-day streak of net withdrawals.
- Weak US jobs data and dovish Fed comments helped Bitcoin rebound by about 7.7% from its weekly low.
- Analysts pointed to July’s strong historical performance and trends of late as sentiment improved.
According to data from SoSoValue, Thursday’s inflows were the strongest daily total in nearly two months after investors pulled nearly $2.7 billion from the funds during the past 10 trading sessions.
The rebound came as Bitcoin (BTC) climbed back above $61,000 after falling slightly below $58,000 earlier this week. According to data from crypto.news, the cryptocurrency recently traded near $62,500, about 7.7% above its weekly low.
Weak economic data is fueling demand for ETFs
Fidelity’s FBTC attracted the bulk of new capital with $166 million in revenue, while ARK 21Shares’ ARKB added $91.8 million and VanEck’s HODL received $4.4 million. BlackRock’s IBIT remained the only major fund to post a payout, losing $40.4 million and extending its outflows that began in mid-June.
The recent buying followed one of the most difficult periods in the history of US spot Bitcoin ETFs. SoSoValue data showed that brands lost nearly $4.5 billion during June, making it their worst monthly performance since launch.
The change comes after the US Labor Department reported that nonfarm payrolls rose by just 57,000 in June, well below market expectations of about 110,000. At the same time, the Chairman of the Federal Reserve Kevin Warsh indicated that the risks of inflation have decreased, reducing the expectations of further interest rate hikes and weakening the US dollar.
A combination of weak labor market data and a less hawkish tone from the Fed boosted investor appetite for risk assets, helping Bitcoin recover and renewed demand for Spot ETF products.
Ethereum investment products also benefited from the improved sentiment. Notably, US Ethereum ETFs attracted $14.9 million in inflows on Wednesday, followed by another $29.1 million on Thursday.
Historical trends for July add to the recovery narrative
While the ETF rebound is driven by macroeconomic developments, several market participants point to historical price patterns that may support Bitcoin during July.
In a July 4 X post, analyst Cyclop said Bitcoin recorded more than 20% gains during July in all previous bear markets, citing CoinGlass monthly return data. The post suggested that the current recovery may be similar to previous bear market rallies, although it did not predict that history would repeat itself.
Separately, crypto analyst Ardi asserted that Bitcoin may be entering the final phase of its current correction based on previous market cycles. According to Ardi, Bitcoin bear markets in the past used to spend almost a year making lows, while the current correction lasted about nine months.
He estimated that this would put the market about three months away from the period that has historically offered the highest chance of a cyclical downturn, although he warned that any lows could come sooner or later than that statistical window.
Despite those historical comparisons, Thursday’s ETF inflows are directly related to expected changes in the macro economy, where investors are reacting to new US economic data and signs that pressure for further tightening by the Federal Reserve may be positive.
