Bitcoin lags S&P 500, Nasdaq despite renewed ETF inflows

• Bitcoin gained 2.15% last week, lagging major equities including the S&P 500 and Nasdaq, despite renewed appetite in risk assets.
• US spot Bitcoin ETFs attracted $853.5 million across five sessions.
• Wintermute noted that upcoming inflation data, Jackson Hole and CLARITY Act developments could determine whether Bitcoin's recent recovery gains momentum.

Bitcoin (BTC) gained 2.15% last week, trailing the S&P 500's 3.51% return and the Nasdaq's 5.09% gain, despite a broad rally across risk assets. The gains came following a weaker-than-expected July payrolls report, according to market-making firm Wintermute.

In an X post on Tuesday, analysts at the firm stated that the macro-driven rally could face a test from US inflation data, with the July Consumer Price Index (CPI) set for release on Wednesday. Wintermute warned that a hotter-than-expected CPI reading could put pressure on the broader risk rally.

Bitcoin ETF inflows rebound ahead of inflation data release

Despite the lag in Bitcoin's momentum, institutional inflows appear to be picking up again. US spot Bitcoin exchange-traded funds (ETFs) recorded $853.5 million in net inflows across five consecutive trading sessions, marking their strongest weekly performance since mid-April.

Ethereum ETFs also attracted $244.9 million during the week, extending their positive streak to five consecutive weeks. More than 80% of the combined Bitcoin and Ethereum ETF inflows went to BlackRock products. The renewed demand represents a notable improvement from the recent rotation away from BTC.

However, Wintermute highlighted that the inflows have yet to produce a stronger price response from BTC.

“The improvement in ETF flows is encouraging, but one week doesn't tell us much about the structural nature of the inflow trend,” Wintermute wrote.

The firm stated that the divergence in Bitcoin's performance from the rest of the risk assets suggests that the ETF bid is still being met with selling pressure.

“ETF inflows are back, but we need to see them continue for a little longer before turning outright constructive,” the firm added.

Wintermute noted that ETF inflows and digital asset treasuries need to “hold up through the end of summer” for the institutional flows to be considered constructive. The major catalysts to determine the outcome include the US CPI and PPI inflation data releases this week, along with the Jackson Hole meeting later in the month and cloture on the CLARITY Act.

Wells Fargo tokenized products add to corporate interest in blockchain settlement

Meanwhile, traditional financial institutions continued moving toward blockchain-based infrastructure. Wells Fargo plans to launch tokenized deposits this fall, initially supporting a USD/GBP exchange for corporate clients via its own blockchain and expanding the offering through 2027.

The development adds to a broader trend of major financial institutions adopting blockchain technology for settlement and payment infrastructure, even as they remain selective about crypto assets themselves.

“Banks are not adopting crypto's assets; they are adopting its plumbing to defend their own, which is the quieter half of the institutionalization trade,” Wintermute shared.

Bitcoin is trading at $63,514, down 0.6% in the past 24 hours at the time of writing.