Bitcoin and Ethereum Bounce After ETF Outflows as SEC Chair Softens Stance on Crypto
Bitcoin and Ethereum bounce after ETF outflows rocked the market, with spot funds for both assets seeing $945 million in redemptions in a single day. Despite the sell pressure, analysts remain optimistic, with Bitwise forecasting BTC will outperform traditional assets over the next decade. Adding fuel to the debate, SEC Chair Paul Atkins said “very few” tokens are securities, a major departure from the stricter view of his predecessor.
Spot ETFs See Major Redemptions
Spot Bitcoin ETFs posted $523 million in outflows, while Ethereum ETFs recorded $422 million, among the largest single-day exits since launch.
Fidelity and Grayscale led redemptions, which analysts attributed to institutional de-risking ahead of key macro events, including the Federal Reserve’s July minutes and Powell’s Jackson Hole speech later this week.
Rachael Lucas, a crypto analyst at BTC Markets, explained:
“Funds are either locking in profits at recent highs and reallocating into cash or Treasuries, or we are seeing broader de-risking tied to renewed inflation concerns and Fed policy uncertainty.”
Crypto Stocks Under Pressure
Institutional volatility also hit public companies tied to Bitcoin. Strategy’s MSTR stock fell more than 7% to $336.57, its lowest since April, after lowering its threshold for issuing new shares.
The change, meant to give the firm more flexibility in raising capital, sparked criticism from observers who accused the company of backtracking on previous guidance. CEO Michael Saylor defended the move, framing it as a way to strengthen long-term capital strategy.
Other crypto-linked equities, including Coinbase (-5.8%) and Galaxy (-10%), also suffered steep declines.
SEC Chair Shifts Tone on Tokens
In a surprising pivot, SEC Chair Paul Atkins said at the Wyoming Blockchain Symposium that “very few” crypto tokens should be classified as securities. While classification still depends on how tokens are packaged and sold, this softer stance contrasts sharply with Gary Gensler’s broad-brush approach.
Atkins also introduced “Project Crypto”, aimed at modernizing securities laws and ensuring regulation does not stifle innovation. His call to “future-proof” crypto against regulatory mischief signals potential collaboration with Congress to pass long-awaited market structure legislation.
Stablecoins in Global Spotlight
Stablecoins remain another focal point:
- Goldman Sachs expects the market to reach trillions of dollars.
- Reports suggest China may allow yuan-backed stablecoins, potentially strengthening the currency’s global role.
- In the U.S., crypto advocacy groups are pushing back against banks attempting to amend the GENIUS stablecoin law.
Together, these developments point to stablecoins playing a growing role in both global trade and regulatory debates.
Bitwise Forecast: Bitcoin to Outperform
Despite the recent volatility, Bitwise sees Bitcoin as the top-performing asset of the next decade. In its upcoming Long-Term Capital Market Assumptions report, Bitwise predicts BTC will return 28% annualized gains, with declining volatility and low correlations to traditional markets.
The report reflects a surge in institutional interest, with 12 platforms requesting long-term BTC projections this year alone, compared to zero between 2017 and 2024.
DeFi Spotlight: Lombard’s $450M Token Launch
Meanwhile, DeFi protocol Lombard announced a $450 million fully diluted valuation for its BARD token, launching via a community sale on Buidlpad. With $1.5B TVL and integrations with Aave, Etherfi, and Pendle, Lombard is positioning itself as a leader in Bitcoin-backed DeFi solutions.
Key Insight
Bitcoin and Ethereum bounce after ETF outflows, but the real story lies in shifting fundamentals. From Bitwise’s bullish forecasts to SEC leadership softening its stance, crypto markets appear to be entering a phase where institutional adoption and regulatory clarity may finally converge.
