Bitcoin Drops Below $63,000 Support Despite BTC ETFs Inflows
- Jul 21
- 3 min read
Updated: Aug 11
Bitcoin traded near $63,000 on Friday after slipping below the level during the session as a global semiconductor selloff rippled across risk assets, while a record stretch of negative pricing on Coinbase pointed to subdued U.S. institutional demand despite continued inflows into spot bitcoin exchange-traded funds.
The largest cryptocurrency briefly dropped below $63,000 before recovering to around $63,900. Ether fell about 1.7%, while total cryptocurrency market capitalization declined to roughly $2.16 trillion.
The weakness coincided with losses across equity markets, with Nasdaq 100 futures falling nearly 2%, S&P 500 futures down about 1%, Japan's Nikkei 225 losing 4%, the U.S. dollar strengthening and gold climbing back above $4,000 an ounce.
Institutional demand remains subdued, Bitcoin ETFs inflows increase
Market data continued to point to weak buying interest from U.S. investors.
According to Coinglass, Coinbase's Bitcoin Premium Index remained below zero for a record 60 consecutive days, with the latest reading at negative 0.1025%. The previous record lasted 40 days between Jan. 16 and Feb. 24.
The indicator measures the price difference between bitcoin on Coinbase and offshore exchanges and has historically been used as a gauge of U.S. institutional demand.
Despite softer spot demand, U.S. spot Bitcoin ETFs recorded net inflows of $79.15 million on Thursday, led by BlackRock's IBIT with $33.44 million, according to SoSoValue. Spot ether ETFs, meanwhile, posted net outflows of $28.04 million.
Monthly Spot Bitcoin ETF Flows Chart (Source: CoinMarketCap)
Bloomberg Senior ETF Analyst Eric Balchunas said bitcoin ETFs could follow a pattern similar to gold-backed funds, where periods of rapid asset growth are followed by prolonged declines and years of subdued demand.
Writing on X, Balchunas compared BlackRock's IBIT with the SPDR Gold Trust, noting that both products provide exposure to assets that generate no cash flow and rely largely on investor demand. BlackRock's bitcoin ETF currently manages about $60 billion after briefly surpassing $100 billion when bitcoin reached a record high in October.
Balchunas said GLD experienced a comparable surge in 2011 before spending years below its previous peak, although each market cycle eventually established a higher asset base.
Altcoins and wider market outlook
Meanwhile, the HYPE token recorded an 8% drop in spot price alongside a 2% increase in open interest, matching Dogecoin (DOGE) with the most negative 24-hour cumulative volume delta among major tokens.
Privacy assets bucked the wider market trend, with Zcash (ZEC) rising 1.56% to $531 and Dash (DASH) advancing 0.78%. AI-linked tokens Fetch.ai (FET) and Bittensor (TAO) gained approximately 0.20%, according to CoinMarketCap data.
At the same time, derivatives markets reflected cautious positioning rather than widespread liquidation. Crypto futures buy-to-sell volume fell to its lowest level since early June, while open interest across major tokens changed little, indicating an orderly reduction in risk exposure.
Bitcoin's 30-day implied volatility also remained near recent lows despite the decline in spot prices.
In energy markets, geopolitical friction in the Middle East remains unaddressed without a formal agreement regarding the Strait of Hormuz, maintaining an energy inflation risk premium. According to the CME FedWatch Tool, the probability of a 50-basis-point Federal Reserve interest rate hike before the end of the year sits at 30%.
JAN MATULA
Founder of Bitcion.Blog
Graduate of Bratislava University of Economics and Business, experienced Forex and Stocks trader since 2008, early Bitcoin investor and crypto trader since 2021.
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