Institutional Confidence Soars: Bitcoin ETFs Receive $310M Inflow Amidst Market Recovery

• Inflows to U.S. spot Bitcoin ETFs reached $310M on July 12, marking the largest since June 5 and indicating institutional buying.
• Bitcoin ETF holdings globally have topped one million BTC, equating to 5.3% of the total circulating supply, setting a new record.
• Despite market volatility, Bitcoin whales are increasing their holdings at a rate of 6.3% month-on-month, signaling rising demand.

The total inflow to the ten U.S. spot Bitcoin ETFs reached $310 million, or 5,361 BTC, on Friday, July 12. This marks the largest inflow to these derivatives products since June 5, according to Farside Investors. Moreover, this is the sixth consecutive day of positive flows, indicating that institutional investors have been buying the bottom of the recent market correction.

The total inflow for the past week has topped a billion dollars. Notably, these products have not seen an outflow since July 3. “In the meantime, IBIT et al. continue to gobble up BTC like Super Pac-Man. Impressive given price still sub-60k after a 20% drop,” commented senior ETF analyst Eric Balchunas in a post on X on July 12.

Mixed Performance of Individual ETFs

The Bitwise Bitcoin ETF BITB had an inflow of around $28 million, while the others were negligible. Even Grayscale’s GBTC spot ETF saw an inflow of $23 million following three days of outflows this week. Outflows from GBTC have slowed significantly. However, the fund has lost around 348,000 BTC, or 56% of its total assets so far this year.

HODL Capital reported that the total amount of BTC held by all Bitcoin ETFs globally has topped one million, a new record high. This equates to roughly 5.3% of the asset’s total circulating supply.

CryptoQuant’s latest weekly crypto report indicates bitcoin’s price may take longer to rally or bottom as stablecoin liquidity growth is not in full swing. Historically, prices rally when more liquidity enters the crypto market through Tether (USDT) minting. However, this condition is yet to be met as the USDT market cap growth is still slowing down.

Stablecoin Impact on Bitcoin Price

On the other hand, the market cap of USD Coin (USDC) has been growing by 5.6% monthly. Regardless, Tether’s slow growth indicates that BTC may not be rallying anytime soon. Analysts at CryptoQuant further revealed that the platform’s Profit and Loss Index signal is hovering over its 365-day moving average. A plunge below this level is often linked to major corrections or the start of a bear market.

Additionally, CryptoQuant’s Bull-Bear Market Cycle Indicator could switch to a bear market if prices plunge further. It has been at its lowest bullish level since early 2023, and a reverse to the bear phase could trigger even more decline in the near term. Contrarily, large Bitcoin investors are now realizing losses. Since BTC dropped to a four-month low of $53,000 about a week ago, new large investors have realized almost $1 billion in losses.

Moreover, the margins of bitcoin traders are negative. This cohort of investors will only realize losses if they continue to offload their holdings. Traders’ unrealized margins are currently 17%, the most negative since the collapse of the bankrupt crypto exchange FTX in November 2022. It is also worth mentioning that bitcoin whales and large investors are increasing their holdings at a rate of 6.3% month-on-month, the fastest pace since April 12. This is a sign of growing bitcoin demand, which usually impacts prices positively.

Read also:

• $310M Surge in Bitcoin ETF Investments Marks One-Month High, BTC Flips Bullish
• Crypto Markets Rally: June Opens with $2 Billion Inflows, Ethereum Shines
• U.S. Spot Bitcoin ETFs Maintain 15-Day Inflow Streak with $105M
• Bitcoin ETFs Hit Second-Highest Inflows Day with $886.6 Million
• US Spot Bitcoin ETFs See Largest Net Inflows in Three Weeks

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