Crypto Surges Over the Holiday Weekend as ETF Flows Flip Green
Cryptocurrencies experienced a significant surge over the July 4 holiday weekend, with major assets climbing and painting the weekly charts green while U.S. markets remained closed.
Bitcoin reclaimed highs above $63,000, marking a 5% increase for the week, though altcoins spearheaded the rally. Among them, LIT saw a substantial 44% jump to $2.50, reaching a new local high following its integration with Robinhood. The broader CMC20 index, which tracks the top 20 digital assets, rose approximately 9%.
Two primary factors contributed to this reversal. Firstly, a softer-than-expected June jobs report released on Thursday, which showed only 57,000 new payrolls compared to an estimated 113,000, alleviated concerns about further interest rate hikes and provided a boost to risk assets.
More significantly, however, was the shift in exchange-traded fund (ETF) flows. After experiencing record outflows totaling over $4 billion in June, spot Bitcoin ETFs recorded net inflows of $223.5 million on July 2. Ethereum ETFs also saw positive inflows for two consecutive days, adding approximately $15 million on July 1 and $29 million on July 2. This marks the first tangible sign of a reversal in the institutional selling that characterized June’s market downturn.
This rebound follows a challenging period, with Bitcoin opening July at a 21-month low of $57,950, after enduring its worst first half of the year since 2018 and 2022. During this period, large holders, often referred to as “whales,” had been absorbing the selling pressure from ETFs, acquiring roughly $16.7 billion worth of Bitcoin over two weeks. This pattern of accumulation by whales has historically preceded market bottoms. The positive shift in ETF flows is a development that many bullish investors had been anticipating.
Michael Saylor’s ecosystem also benefited from the Bitcoin rally. MicroStrategy (MSTR) stock rebounded 21% to reclaim the $100 mark, while its subsidiary, Saylor Technologies (STRC), jumped 21% to close the week at $87.87, recovering from lows near $70.
While a couple of days of positive performance do not erase the impact of a month marked by record outflows, altcoins outperforming Bitcoin is a classic indicator of increased risk appetite in the market. For the first time in weeks, the flow data suggests an upward trend. The market will now be watching to see if this momentum can be sustained once full market liquidity returns.
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