Bitcoin has been losing value since hitting a peak of $114,278 on July 14. Over the weekend, BTC dropped by 8.5%, falling to $112,300 before recovering to around $115,000 late Monday. However, this rebound wasn’t enough to prevent ETF outflows. 

The $292 million outflow from IBIT represents just 9% of the $5.2 billion in net inflows recorded in July. While relatively small in the broader context, the outflow is still notable. 

Decreasing Interest in Spot Bitcoin ETFs: What Are Institutional Investors Doing? 

U.S.-listed spot Bitcoin ETFs saw outflows for a third consecutive trading day. Fidelity’s FBTC lost around $40 million, and Grayscale’s GBTC recorded a $10 million outflow. Other U.S.-based ETFs saw no significant inflows, except Bitwise’s BITB fund, which attracted $18.7 million. 

These developments came as Bitcoin bounced off the $112,000 support level. Notably, Monday’s total ETF outflow was smaller than Friday’s $812 million, indicating a potential slowdown in redemptions. 

Still, digital asset investments remain significant in institutional portfolios. Bloomberg ETF analyst Eric Balchunas noted that while growth in private investment vehicles is slowing, hedge funds and digital assets are gaining market share. JPMorgan analyst Nikolaos Panigirtzoglou echoed this sentiment, pointing to substantial capital inflows into digital assets. 

As of July 22, investment in digital assets reached $60 billion, down from $85 billion last year. This underscores the growing prominence of digital assets among alternative investment options. 

Spot Bitcoin and Ethereum ETFs listed in the U.S. recorded a combined $787 million in net outflows as of August 4, 2025. Spot Bitcoin ETFs lost $322 million, while Ethereum ETFs saw a $465 million capital exodus. 

BlackRock’s ETHA fund alone saw a massive $374.97 million outflow. On the same day, Fidelity’s FETH fund lost $55.11 million, and Grayscale’s ETHE recorded a $6.98 million outflow. Bitwise’s ETHW was the only Ethereum ETF to register inflows, pulling in $415.98 million. 

Despite this, Ethereum ETFs’ total net asset value has reached $20.47 billion, equivalent to 4.70% of Ethereum’s market cap. 

Volatility Drops, Bitcoin Attracts New Investors 

According to Balchunas, Bitcoin has not experienced major volatility since the launch of spot ETFs. The 90-day volatility, which hovered above 60 in January 2024, has fallen below 40 for the first time in IBIT. This decline makes Bitcoin appear more stable. 

As a result, BTC has become a more attractive asset for institutional investors. Lower volatility has facilitated its adoption both as an investment vehicle and an alternative currency. 

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Bitwise argues that staking could enhance investor returns. The company clarified that it has not altered the ETF structure, emphasizing that the proposal only aims to increase the potential for passive income. However, the SEC raised concerns that staking might elevate potential risks for investors and could lead to conflicts of interest. 

Previously, Ethereum ETFs were approved solely for holding spot ETH. Bitwise now seeks to incorporate staking within the ETF to earn additional rewards by locking up ETH in the Ethereum network. This system, known as staking, involves earning new coin rewards in return for securing the blockchain. 

To better understand the impact of this proposal on investors, the SEC is requesting public commentary, with particular focus on the risks associated with staking. Key concerns include investor control over staked assets, potential for fraud, and lack of transparency. 

Notably, the SEC’s decision will not only affect Bitwise’s application but could also set a precedent for other Ethereum ETF providers. If approved, staking support could usher in a new era for crypto ETFs. 

DOGE ETF Decision Also Delayed: SEC Postpones Review of 21Shares Application 

The SEC’s focus is not limited to Ethereum ETFs. The application from 21Shares for a Dogecoin (DOGE)-based ETF also failed to progress to the next stage of evaluation. The commission extended the review period by an additional 60 days for a more detailed assessment. 

21Shares submitted its DOGE ETF application earlier this year, triggering major discussions about the role of highly volatile assets like DOGE in regulated investment products. The SEC has yet to provide a clear stance on how such speculative assets should be treated in ETF form. 

However, this delay does not necessarily mean rejection. The commission is examining whether the application aligns with investor protection, market fairness, and transparency principles. 

A New Era for Crypto ETFs May Be Approaching 

Staking-related proposals are reframing crypto investment products not just as value-holding tools but also as yield-generating instruments. Bitwise claims adding staking features to its Ethereum ETF could appeal to both retail and institutional investors. 

Ultimately, the SEC’s decisions on these proposals will influence not just Bitwise but all fund managers in the space. If staking is approved, it may lead to the development of similar staking-enabled ETF models for Ethereum and other proof-of-stake (PoS) cryptocurrencies. 

Meanwhile, another development in the crypto space: RexShares-Osprey CEO Gregory King announced that the company would launch a Solana staking ETF on July 2. This move signals growing momentum behind staking-enabled ETFs. 

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Institutional interest in U.S.-based spot Bitcoin ETFs gained renewed momentum on Wednesday, with a total net inflow of $390.4 million — nearly double the previous day’s amount. BlackRock’s iShares Bitcoin Trust (IBIT) led the way with a single-day inflow of $280 million, further cementing its dominance. 

Robust Institutional Demand for Spot Bitcoin ETFs 

Fidelity’s FBTC product also drew attention with over $100 million in inflows, signaling growing investor confidence and a stabilizing market. During this period, BlackRock added 2,861 new Bitcoins to its portfolio, bringing its total BTC holdings to 680,336. 

Since the beginning of 2025, total net inflows into U.S. spot Bitcoin ETFs have reached $11.25 billion, underlining the continuing rise in institutional demand. Notably, Bitcoin ETF products have posted positive net inflows for eight consecutive trading days. 

Bitcoin and Gold Strengthen Amid Geopolitical Tensions 

Rising tensions between Iran and Israel have heightened risk perception in global markets. With potential interventions from the U.S. and the U.K., investors have turned to safe-haven assets. This climate has seen an uptick in both BTC ETF inflows and gold prices. 

At the same time, BTC’s price held steady at the $104,000 level, maintaining its resilience. According to on-chain data, the STH/LTH Supply Ratio dropped to 15.7%, indicating reduced activity among short-term holders and continued confidence from long-term investors. 

Federal Reserve Chairman Jerome Powell’s decision to maintain interest rates following the recent FOMC meeting has also reinforced a “wait-and-see” sentiment in the markets. Despite geopolitical risks, crypto assets continue to attract solid institutional interest. 

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