Bitcoin held above $118,700 on Thursday as global digital asset markets faced increasing pressure from profit-taking and continued outflows from Bitcoin exchange-traded funds (ETFs).
The world’s largest cryptocurrency by market cap came under fresh selling pressure as long-term investors took profits, while US-based Bitcoin ETFs continued to record net outflows. This mix of macroeconomic and market-specific factors weighed on prices, despite sustained underlying demand.
At the same time, Tesla (TSLA) reported unrealized gains on its Bitcoin holdings for the second quarter, marking its first crypto-related earnings boost under new US accounting rules, which now allow digital assets to be valued at market price.
Tesla currently holds approximately 11,509 Bitcoin, mostly acquired in 2021. With Bitcoin rising 30% in Q2, these holdings are now valued at around $1.2 billion.
ETF outflows accelerate as market enters consolidation phase
Data from Farside Investors showed that US-listed Bitcoin ETFs posted net outflows for a third consecutive day. On Wednesday alone, investors withdrew $86 million from these funds, bringing total weekly outflows to over $285 million.
However, not all ETFs saw losses. BlackRock’s iShares Bitcoin Trust (IBIT) recorded $143 million in net inflows. Still, these gains were outweighed by a large $227 million outflow from Fidelity’s Bitcoin fund, along with moderate withdrawals from Bitwise (BITB) and ARK Invest (ARKB) funds.
Adrian Fritz, Head of Research at 21Shares, said Bitcoin remains fundamentally strong despite short-term volatility. “After surging to a new all-time high near $123,000 in mid-July—driven by a technical golden cross and sustained institutional inflows—Bitcoin has since settled into a tight range between $115,000 and $120,000.”
He added that this sideways movement is supported by strong buying interest near $115,000, creating a healthy liquidity battle on both sides of the market.
Fritz also pointed to a more complex macroeconomic backdrop, referencing President Trump’s July 4 signing of the controversial “One Big Beautiful Bill,” which raised the US debt ceiling by $5 trillion and expanded tax cuts and military spending.
Although crypto-friendly provisions like staking and airdrop tax exemptions were removed from the final version, Fritz said the broader implications may still support Bitcoin in the long run.
“Increased borrowing and fiscal spending typically lead to long-term inflationary pressure, which in turn drives demand for hard assets like gold and Bitcoin.”
He also cited newly released US CPI data, which showed inflation rising to 2.7% in June from 2.4% in May, as further evidence of sustained inflationary trends.
Tesla posts Bitcoin gains amid challenging quarter
Tesla’s Q2 earnings came in below market expectations, with revenue of $22.5 billion versus a forecast of $22.64 billion. Adjusted EPS was $0.40, slightly under the expected $0.42. This marks a 12% year-over-year revenue decline—the company’s steepest drop in over a decade.
Operating income also fell to $923 million, well below the expected $1.23 billion. Revenue from regulatory credit sales dropped to $439 million, down from $890 million in the same quarter last year.
However, Tesla’s Bitcoin holdings emerged as a bright spot. The company recorded unrealized gains under the new 2024 accounting standards, and these were included in its reported financials, offering a modest boost amid weaker vehicle sales.
