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Bitcoin started July on a firmer note after a difficult June, with fresh inflows into US spot Bitcoin ETFs and renewed attention on US crypto legislation. Although June brought heavy ETF withdrawals and lower prices, the latest data shows some institutional investors returned to regulated Bitcoin investment products while the market monitored policy and security developments.
Bitcoin ended June near a two-year low after falling to about $58,000. Market data showed that US spot Bitcoin ETFs recorded about $8.9 billion in net outflows since early May, including roughly $4.51 billion during June alone. The withdrawals marked the weakest month for the ETF category since launch.
Santiment reported that retail investors increased small Bitcoin holdings during the second half of June, while larger holders reduced exposure. The analytics firm stated that large investors remained cautious as they waited for stronger signs that the market had reached a bottom.
The report also noted that capital shifted toward AI and semiconductor stocks during June. According to Santiment, those sectors attracted investment that previously flowed into cryptocurrencies, reducing institutional demand for Bitcoin during the month.
HashKey researcher Tim Sun also addressed the trend. He said, “capital was reallocating across risk assets rather than that investors were losing their appetite for risk altogether.” He added that Bitcoin could attract that capital again if the AI sector slows.
Market conditions improved during the first week of July as US spot Bitcoin ETFs posted $526.64 million in weekly net inflows despite continued market uncertainty. The positive flows followed one of the largest monthly withdrawal periods recorded by the ETF market.
The weekly inflow suggested that some institutional investors continued allocating capital to regulated Bitcoin products even after June's decline. Analysts noted that ETF flow data remains an important measure because spot ETFs purchase actual Bitcoin rather than futures contracts.
Bitcoin also traded above $62,000 as investors followed developments surrounding the proposed CLARITY Act in the United States. Prediction market data showed rising expectations that the legislation could advance before Congress begins its August recess.
The proposed bill has support from more than 200 crypto companies, including Coinbase, Ripple and Kraken. Supporters believe clearer regulations could encourage broader participation in digital asset markets, although lawmakers have not yet approved the legislation.
Strategy also remained part of the market discussion after Executive Chairman Michael Saylor introduced a Digital Credit Capital Framework designed to strengthen liquidity and support the company's preferred stock obligations.
Saylor also responded to concerns about Strategy's Bitcoin position. He stated, “the company had bought about 175,000 BTC this year,” while adding that “he had not sold any of his personal stash.” Strategy currently holds more than 818,000 BTC, making it the world's largest corporate Bitcoin holder.
Meanwhile, blockchain security returned to focus after researchers disclosed that they identified and fixed a critical vulnerability on the Aptos blockchain before attackers could exploit it. Security firm Hexens said the issue could have affected infrastructure supporting as much as $70 billion in digital assets, although no funds were lost.
Elsewhere, blockchain analytics firm Nansen estimated that holders of the TRUMP memecoin have accumulated about $3.8 billion in combined losses after the token declined sharply from its peak. As July progresses, traders continue watching ETF flows, regulatory developments, institutional activity and broader market conditions for signs of Bitcoin's next direction.
Also Read: Galaxy Cuts CLARITY Act Passage Odds to 50% Over Senate Scheduling Delays
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