[123rf]
[123rf]

US spot bitcoin ETFs have recorded six consecutive trading days of net inflows, drawing attention to whether frozen investor sentiment is finally thawing. Analysts say the streak has been driven by expectations that the CLARITY Act — the US digital asset market structure bill — will advance through Congress, combined with a growing perception that bitcoin prices have neared a bottom.

According to digital asset data platform SoSoValue, US spot bitcoin ETFs posted net inflows for six straight trading days from July 14 through Tuesday. Daily net inflows were $181.08 million on July 14, $107.8 million on July 15, $79.15 million on July 16, $132.3 million on July 17, $226.92 million on Monday and $203.14 million on Tuesday. Total net inflows over the period reached $930.39 million.

Markets are paying close attention to the reversal of an outflow trend that had persisted for roughly two months. US spot bitcoin ETFs recorded monthly net outflows of $2.43 billion in May and $4.51 billion in June. Flows this month had shown no clear direction until inflows began on July 14, prompting some analysts to suggest that institutional investor demand is gradually recovering.

"Initially, inflows were concentrated in select products, but the fact that they subsequently spread to large ETFs such as BlackRock's IBIT can be interpreted as a signal that institutional investment demand is gradually recovering," a Bitplanet official said.

Bitcoin prices also moved higher. According to CoinMarketCap, bitcoin was trading at $66,436 as of 11:18 a.m. Wednesday, up 1.94 percent from 24 hours earlier. The price had recently been pushed back to the low $60,000s before recovering above the $66,000 level.

Analysts say a slowdown in US employment has helped ease concerns about further Federal Reserve rate hikes, improving sentiment toward risk assets. US nonfarm payrolls rose by 57,000 in June, falling well short of market expectations. April and May figures were also revised down by a combined 74,000, deepening signals of a cooling labor market.

With the Fed now widely expected to hold its benchmark interest rate at the upcoming Federal Open Market Committee meeting, a more favorable environment has taken shape for risk assets sensitive to rate increases, including bitcoin and technology stocks. According to the CME FedWatch Tool, markets are pricing in a 73.8 percent probability that the Fed will hold rates steady at the July 29 FOMC meeting.

The most direct catalyst cited for the ETF inflows is the prospect of the CLARITY Act passing. Reports of progress on one of the bill's most contentious provisions — an ethics clause related to President Donald Trump — have revived legislative optimism.

Eleanor Terrett, host of Crypto in America, said Tuesday on X, formerly Twitter, that "the White House has agreed to the ethics provision in the CLARITY Act and communicated the details to some Republican senators that afternoon."

"It appears that inflows came in as the market judged the CLARITY Act has a real chance of passing," said Hong Seong-wook, a researcher at NH Investment Securities. "News of progress on the ethics clause related to President Trump — the most critical sticking point — combined with the perception that bitcoin had fallen significantly, appears to have influenced buying momentum," he added.

Hong said that if the FOMC outcome proves more dovish than expected, it could certainly affect bitcoin inflows, but added that for now, the policy issue deserves the closest attention, as the CLARITY Act could be decided within the next two to three weeks.

Meanwhile, some analysts argue that bitcoin ETFs could follow a price trajectory similar to that of gold ETFs over the long term. Because both bitcoin and gold are stores of value that generate no cash flows on their own, their price volatility may be driven more by investor sentiment than by corporate earnings or bond yields.

"Both gold ETFs and bitcoin ETFs hold stores of value that generate no returns as their underlying assets," Bloomberg ETF analyst Eric Balchunas said on X on July 17. "Without factors like corporate earnings for stocks, interest from bonds, or government support, sentiment is what drives performance," he said.

SPDR Gold Shares (GLD), the flagship gold ETF, once ranked as the world's largest ETF after its launch but fell into a prolonged slump, taking eight years to recover its previous highs. Balchunas said bitcoin ETFs "could similarly cycle through sharp rallies and steep drops, with long recovery periods that test investor patience."


kyoung@heraldcorp.com