Institutional Digital Asset Flows Narrow Amid Signs of Conviction

The institutional flow of digital assets in July showed a significant narrowing of net outflows across Bitcoin, Ethereum, and stablecoins. The acute phase of institutional de-risking appears to be over, with capital still leaving the ecosystem but at a slower pace.

Bitcoin's net capital flow narrowed from -$17.3 billion at the start of the month to -$4.1 billion by its end, while Ethereum improved from -$6.1 billion to -$0.8 billion. Stablecoins also followed this trend, easing from a -$6.6 billion trough on July 2 to -$2.2 billion.

The spot ETF flows swung back to inflows in July, reversing the roles played by the treasury bid and ETF channels in June. US spot ETFs opened at -70.4k BTC and -269.4k ETH before recovering steadily to close at +5.4k BTC and +190.8k ETH.

Ethereum DeFi TVL rebounded in July, with net flows flipping positive and reversing June's contraction. Total value locked on Ethereum climbed from $36.6 billion at the start of the month to $41.1 billion by its end, touching $42.1 billion on July 27.