Bitcoin Spot ETF Outflows Ease... July Net Outflows at $100 Million [Crypto Briefing]

[Financial News] Major Bitcoin spot exchange-traded funds (ETFs) listed on the U.S. stock market saw smaller net outflows, according to data. However, uncertainty remains over crypto-related legislation such as the Digital Asset Market Clarity Act, and analysts say it remains to be seen whether fund flows will turn positive.
According to Farside Investors and industry sources on the 3rd, about $100 million in net outflows were recorded last month from major Bitcoin spot ETFs, including BlackRock IBIT, Fidelity FBTC, and Grayscale GBTC, between the 1st and 30th. The outflow narrowed sharply from the massive withdrawals seen over the previous two months. Kiwoom Securities said favorable macroeconomic conditions, including easing U.S. inflation, likely played a role.
Bitcoin prices also rebounded. According to Investing.com, Bitcoin rose 7% over the month of July. Still, further gains were limited as tensions in the Middle East persisted and the July Federal Open Market Committee (FOMC) outcome from the Federal Reserve was interpreted as hawkish by the market.
There are also views that demand for crypto trading has not yet fully recovered. According to CoinGecko and others, the total crypto market capitalization rose by $100 billion from the previous month to $2.3 trillion last month, but monthly trading volume on crypto exchanges fell to about $600 billion.
Shim Subin, a researcher at Kiwoom Securities, said, "Prices of major crypto assets such as Bitcoin have risen and outflows from spot ETFs have eased, but retail investor participation remains sluggish."
Demand from digital asset treasury strategy companies buying Bitcoin is also weakening. Strategy, the world's largest listed company by Bitcoin holdings, sold 2,225 Bitcoins to secure funds for preferred stock dividends and dollar reserves. It then made no additional Bitcoin purchases through the 26th of last month.
Strategy increased its dollar reserves to $3.75 billion by selling common stock (MSTR). It also bought $25 million worth of its own preferred stock (STRC), which had fallen below its $100 par value, at an average price of $86.52.
STRC is the preferred stock Strategy has used to raise funds for Bitcoin purchases. Since STRC is trading below par, analysts say it may be difficult for the company to resume fundraising through the stock and restart Bitcoin buying in the near term.
Looking ahead, the crypto market, including Bitcoin spot ETF flows, is expected to be influenced by U.S. monetary policy, Middle East developments, and whether the Digital Asset Market Clarity Act, a bill on the structure of the U.S. crypto market, is passed.
Republicans are pushing for a vote on the Digital Asset Market Clarity Act before the Senate summer recess begins on the 7th. However, industry consensus is that securing the 60 votes needed for passage remains uncertain because of disagreements over ethics provisions dealing with crypto business activities and conflicts of interest involving the president and other public officials.
Hong Sung-wook, a researcher at NH Investment & Securities, said, "If passage of the Digital Asset Market Clarity Act falls through this year, market volatility could emerge." He added, "What matters is that the crypto industry's long-term direction will not change."
[email protected] Kim Mi-hee Reporter