Eight weeks of pain, two weeks of hope: Spot BTC ETFs are back in green — barely 🟢

U.S. spot Bitcoin exchange-traded funds ended an eight-week run of net outflows with $197.4 million in inflows for the week ended July 17, according to SoSoValue and Farside Investors data, marking the first positive week for the products since early May. BlackRock's iShares Bitcoin Trust ETF (IBIT) did most of the heavy lifting, posting $291.9 million in inflows, while the Grayscale Bitcoin Trust ETF, Fidelity Wise Origin Bitcoin Fund (FBTC), and ARK 21Shares Bitcoin ETF (ARKB) recorded offsetting outflows. The rebound came after investors withdrew roughly $8.26 billion from the funds between May 11 and mid-July, with June alone accounting for a record $4.51 billion in net outflows. U.S. spot Ether ETFs broke their own eight-week losing streak in tandem, drawing $84.42 million in net inflows for the same week, led by BlackRock's ETHA and Fidelity's Ether fund, per SoSoValue.

The recovery, however, proved fragile. Spot Bitcoin ETFs posted $424.66 million in net outflows the following Monday — the category's largest single-day withdrawal in July — as renewed U.S.-Iran military escalation rattled markets and pushed Bitcoin below $63,000. IBIT again drove the flow, accounting for nearly $415 million of the two-day outflow total on Thursday and Friday of the following week, when the funds shed $225.2 million and $240 million respectively, according to Farside Investors. Even so, the segment finished that second week net positive by roughly $33.8 million, extending the green streak to three consecutive weeks and bringing July's running total to about $200.2 million in net inflows.

Analysts pointed to the modest scale of the inflows as evidence that institutional conviction has yet to fully return. "While one week of inflows doesn't define a trend, it comes at a time when institutional confidence is growing around the potential passage of the CLARITY Act in the US in August," Monochrome Asset Management founder and CEO Jeff Yew told Cointelegraph. Markus Thielen, founder and CEO of 10x Research, struck a more cautious note, citing ETF and stablecoin outflows and seasonal headwinds in August and September. On July 1, Citi cut its 12-month spot Bitcoin ETF inflow forecast from $10 billion to zero and lowered its 12-month Bitcoin price target from $112,000 to $82,000.

Despite the uneven flows, Bitcoin (BTC) climbed from below $63,000 to a July high above $66,700 during the multi-day inflow streak before retracing. The Crypto Fear & Greed Index ticked up to "fear" from "extreme fear" mid-period before falling three points to 28 on the late-week selloff. Bloomberg Intelligence senior ETF analyst Eric Balchunas drew parallels between Bitcoin ETFs and gold ETFs, arguing both products could follow a pattern of "spectacular gains, painful drawdowns and recoveries." U.S. spot Bitcoin ETFs now hold total net assets of $80.9 billion and cumulative net inflows of $51.8 billion since launch in January 2024, with year-to-date net flows still negative at roughly $4.84 billion. The Federal Reserve's July 28-29 FOMC meeting, where Kevin Warsh is expected to chair, and Tuesday's CPI print loom as the next catalysts for ETF demand and Bitcoin's near-term direction.