Bitcoin ETF Outflows Snapped Streak as Fed Rate Concerns Mount
Concerns over potential US Federal Reserve interest rate hikes have dented investor confidence in Bitcoin, leading to significant outflows from US-listed Bitcoin exchange-traded funds (ETFs). The ETFs saw more than $465 million of withdrawals on July 23 and 24, snapping a seven-session inflow streak. This outflow comes despite the recent recovery of Bitcoin above $65,000.
The fragility of the token's momentum was further compounded by shifting developments in the Middle East, which have added to its volatility. The US and Iran extending a pause in retaliatory strikes has eased concerns about potential disruptions to regional energy supplies, causing Bitcoin to surge 1.4% alongside other risk assets.
Ivan Lim, a senior derivatives trader at FalconX, attributed the recent outflows and fragile mood to 'macro-driven uncertainty' surrounding legislative waiting on the Clarity Act and faster Fed rate hike expectations. Despite this, he maintained that his outlook on Bitcoin remains 'structurally bullish', citing the token's underlying fundamentals.
The bitcoin ETFs recorded $33.8 million of inflows for the full week, marking a third consecutive week of inflows following eight weeks of redemptions totaling $8.3 billion. The latest data indicate that while institutional investors have returned selectively after a prolonged period of redemptions, conviction remains weak.