Bitcoin trades near $62,920.00 while XRP hovers just above its $1 support level, as stalled U.S. crypto legislation, renewed bitcoin ETF outflows and climbing Treasury yields combine to pressure the market. Some analysts, however, still expect a rally before year-end.
Regulatory setbacks pile up
Bitcoin is under pressure again, and XRP is teetering near $1 amid a cluster of unfriendly developments over the past day. Progress on the Clarity Act has stalled in the Senate, and the U.S. Securities and Exchange Commission is reportedly set to further delay its long-awaited "innovation exemption," a rule meant to ease trading of tokenized securities under existing law. The White House and Wall Street have both raised concerns over the proposal's legal footing and potential market impact.
The SEC's parallel "Reg Crypto" effort to write fundraising rules for token projects has been delayed too, after the agency abruptly postponed Friday's planned open meeting without setting a new date. Separately, index provider MSCI has opened a consultation proposing to remove non-operating companies from its equity indices, naming bitcoin holders Strategy and Metaplanet among those targeted for deletion.
ETF outflows reverse last week's inflows
Fund flows aren't helping either. Spot bitcoin ETFs are bleeding again, with U.S.-listed funds shedding $333 million in net outflows so far this week. That reverses last week's $853 million of inflows, which had hinted at returning institutional demand. On a year-to-date basis, investors have pulled over $4 billion from these funds.
Rising yields add to the strain
Treasury notes, which underpin global finance, are adding pressure too. On Thursday, a $25 billion auction of the U.S. 30-year note drew yields as high as 5.22%, a level some dealers called the highest since 2001. Rising long-term yields make capital costlier and raise the opportunity cost of holding non-yielding assets like bitcoin, compounding an already shaky backdrop.
Taken together, stalled legislation, weak ETF demand and climbing yields suggest little room for an outright rally, and XRP looks fragile too. The token has so far held on to its $1 support, a level that, if breached, could prompt holders to sell.
Mena: rally conditions still building
Not everyone is bearish. Matt Mena, senior crypto research strategist at 21shares, said the total crypto market outperformed the S&P 500 and Nasdaq-100 by 7.5 and 14.2 percentage points, respectively, in July, and that this sets up a strong Q3 and a potentially explosive Q4 for bitcoin, ether and other majors.
Source: CoinDesk
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