Crypto ETF flows turn positive in July

TL;DR

1. Bitcoin closed July up roughly 8%, its best monthly return since April 2025, while the S&P 500 and Nasdaq 100 fell 1% and 7% respectively, marking crypto's strongest month of relative outperformance this year.
2. Bitcoin and Ethereum ETF inflows both turned positive in July for the first time since April, with Bitcoin pulling in $403 million and Ethereum $359 million in net inflows, a structural shift in demand that aligns with the $58,000 support level holding across the month.
3. Ethereum and Solana fundamentals strengthened through the drawdown: Ethereum stablecoin assets under management grew 22.49% year-over-year to $155.9 billion, and Solana now accounts for over 36% of all decentralized-exchange spot volume (roughly twice Ethereum's share), suggesting the asset class is building from the ground up, not just recovering from the top.

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After three months of pressure, crypto found its footing in July. Total market cap climbed 8%, with bitcoin holding the $58,000-$60,000 support zone throughout the month, closing up ~8%, its best return since April 2025. Two variables now dominate the second-half outlook: the CLARITY Act, facing an August 7 Senate deadline ahead of the recess, and the September Fed decision. 

While no bottom can be called with certainty, a few structural trends point toward the beginning of a prolonged consolidation following an uptrend.

Crypto outperformed equities in July, and the flows data backs it up

The S&P 500 and Nasdaq 100 are down 1% and 7%, respectively, while bitcoin logged its best daily close since April, despite a mixed backdrop. CPI and PCE both came in cooler than expected, yet bond yields barely moved, and markets still price one more hike this year, with 2-year TIPS yielding almost 2% above inflation and short-dated real yields up over 1% in three months.¹ That tightness is biting the AI capex boom, with investors in this year's largest raises, including Google, SpaceX, and Cerebras, now underwater. Energy is the wildcard: geopolitical tensions flared, and the US memorandum of understanding with Iran is off, keeping fuel prices elevated.

ETF flows have turned positive for the first time since April

Bitcoin ETF flows turned positive for the first time since April, with $403 million in net inflows in July. That aligns with the $58,000 support level we flagged in last month's issue, which held as buyers defended it with substantial order book support.

Ethereum ETFs had an even stronger month relative to their market cap, pulling in $359 million in net inflows, outpacing bitcoin's ETF flows of the month at approximately $403 million by almost 300% on a market cap-adjusted basis.² On returns, Ethereum also outpaced bitcoin by nearly 2.5x in July, up 19% against bitcoin's 8%.

Blue-chip tokens such as ETH and SOL are beginning to show relative strength, and their fundamentals are following.

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Beneath the price, Ethereum's fundamentals are flashing green

Price gets attention, but July's more durable story was underneath it. Two Ethereum-focused groups, EthLabs and Ethereum Institutional, launched this month, backed by names including Tom Lee and Ethereum co-founder Joe Lubin, positioning as the business development arm bringing institutions onto Ethereum's rails. A structural catalyst, not a price signal, it lands against fundamentals strengthening across the board year-over-year, H1 2025 to H1 2026:

• Stablecoins: assets under management up 22.49% to $155.9 billion.³ 
• User adoption: monthly active addresses up 15.07% to 8.4 million.⁴ 
• Developers: count up 13.5%, apps deployed up 73.7%.⁴

More capital, more users, and more building is the kind of convergence that tends to precede an uptrend in price rather than follow it.

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Solana's use case has broadened, and the metrics prove it

Last year, Solana was criticized as a venue for memecoin trading and little else, but that no longer holds. Solana's durable use cases have grown as speculation faded, and the shift shows up in metrics and flows:

• US ETF flows: Roughly $341 million in net flows year-to-date
• Spot onchain volume: Solana accounts for over 25% of all decentralized exchange (DEX) volume in July, roughly double Ethereum's share.⁵
• Memecoins: Only 16% of spot DEX volume, down 26% year-over-year from over 40% volume share last year.⁶ 
• Stablecoins: While only 5% of the $310 billion market is minted on Solana, over 35% of all stablecoin transactions settle on the network.⁷ Stablecoins under management on Solana grew 50% year-over-year.

Two pending proposals, SIMD 550 and 553, would cut the inflation rate by roughly 15% to 30% and tighten Solana's supply by increasing token burns to 100% of fees. With most supply now unlocked, the setup looks increasingly constructive for Solana token holders.⁸

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Two catalysts to monitor into August

Bitcoin spent most of July pinned between $60,000 and $65,000, trading there 52% of the month, a zone that has become the line in the sand to hold before any move higher.⁹ As flagged last month, $66,000 remains the level bitcoin has struggled to break, capping price for approximately 50 days, the largest resistance block of this bear market. A clean break above it on high volume is the signal many traders are watching for.

1) Upcoming September Fed meeting

With Polymarket pricing only a 4% chance of a rate cut, it is worth working through how bitcoin's price has historically reacted to Fed decisions since the US spot ETFs launched in January 2024.¹⁰ Below are our findings:

The medians matter alongside the averages, since one outlier, November 2024's post-election run, inflates the mean cut return. On a median basis, the picture is more subdued: cuts show a modest 1.15% monthly gain while holds skew 2.97% lower. The reaction fades rather than trends because these decisions are usually priced in beforehand, with the September 2024 50bps cut being the only real surprise in the set; bitcoin spiked 10.78% a month after. Fed decisions are not the only driver; other factors also shape bitcoin's price in the short run, including liquidations, geopolitical events, and broader network adoption through ETFs and the Lightning Network.

2) Hyperliquid's HIP 4: permissionless prediction markets

HIP-4 is Hyperliquid's outcome-markets feature, bringing it into direct competition with Polymarket and Kalshi.

The mechanism matters because it turns the app into a one-stop venue, feeding the revenue-to-buyback loop that HIP-3 established across financial markets. The permissionless design is what scaled HIP-3 from under 20% of volume before the February war to over 50% at mid-July peaks, and the same model now applies to outcome markets. The comparison with Polymarket and Kalshi is instructive but partial: the dynamics are not identical.

Relative sizing: Kalshi and Polymarket combined saw nearly $40 billion in volume in July, with Kalshi as the clear leader.

For buybacks, Hyperliquid keeps approximately $1.30 per $10,000 in HIP-3 trading. Assuming the same fee structure for HIP-4, if its markets grew to even 10% of that volume (approximately $4 billion per day), that would add approximately $200 million in annual revenue and buybacks; roughly a 33% increase on current levels. At current growth rates, while being variable, that could translate to approximately $0.5 million per day in additional HYPE buybacks.

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What to expect: bull and bear case scenarios

Bull case: durable de-escalation and a Fed pivot 

If oil settles back under $70 for a sustained stretch, the Fed gains room to put cuts back on the table for H2 2026, a meaningful shift from current market pricing, which sees no cut until 2028. Combined with the CLARITY Act clearing the Senate before the August recess (where momentum is building following President Trump’s agreement to the ethics provisions that had been a sticking point, though Senate Democrats, whose votes are still needed to reach 60, have yet to sign on), this could allow bitcoin to reclaim $70,000. 

We view $80,000 as achievable from that position, with a year-end push toward $100,000 as plausible, noting that the last three Q3s averaged a 6.09% gain. This remains a contested view and carries material downside risk as $50,000-$55,000 is still an achievable downside level. Past performance is not a reliable indicator of future results.

Bear case: re-escalation and a hawkish Fed 

If geopolitical tensions keep pushing energy prices higher, particularly through a potential closure of Bab al-Mandab, inflation fears could intensify and push the Fed in a hawkish direction heading into September and Q4. That would risk bitcoin breaking below the $57,000-$58,000 support zone, which has been retested four times since June, with a further slide toward its realized price, around $53,000.

The structural picture, however, has shifted. ETF flows are positive for the first time since April, and Ethereum and Solana’s fundamentals have strengthened through the drawdown that began in October 2025. Support has held. Whether that adds up to a bottom will only be clear in hindsight, but the divergence between weakening price and improving fundamentals is a pattern worth watching.

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FAQ

Did bitcoin outperform equities in July 2026?
Yes. Bitcoin closed up roughly 8% in July 2026, its best monthly return since April 2025. The S&P 500 and Nasdaq 100 fell 1% and 7%, respectively, over the same period, making bitcoin one of the strongest-performing assets of the month.

Have bitcoin ETF inflows turned positive again?
Yes. Bitcoin ETF net inflows turned positive in July 2026 for the first time since April, totaling $403 million for the month. Ethereum ETFs also pulled in $359 million, outpacing bitcoin on a market cap-adjusted basis by nearly 300%.

What is the CLARITY Act and why does it matter for crypto?
The CLARITY Act is US legislation that would establish a clearer regulatory framework for digital assets. It faces an August 7, 2026 Senate deadline ahead of the congressional recess -- a key policy milestone that many market participants view as a potential catalyst for bitcoin and broader crypto markets.

Are Solana's fundamentals improving in 2026?
Yes. Solana now accounts for over 36% of all decentralized-exchange spot volume -- roughly twice Ethereum's share -- and memecoin trading has fallen to just 16% of spot DEX volume, down from over 40% year-over-year. Stablecoins under management on Solana grew 50% year-over-year, and US Solana ETFs have seen positive net inflows every month since launching in November 2025.

What happens to bitcoin when the Fed holds rates unchanged?
Based on data since the US spot Bitcoin ETF launched in January 2024, bitcoin has shown a median 1-month return of -2.97% following unchanged Fed decisions. The reaction tends to fade rather than trend, as rate decisions are usually priced in beforehand. Fed policy is one of several factors that affect bitcoin's price in the short run, alongside liquidations, geopolitical events, and network adoption.

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Footnotes:

1. CME Group. "FedWatch." Retrieved July 21, 2026. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
2. CoinGecko. "Ethereum." Retrieved July 21, 2026. https://www.coingecko.com/en/coins/ethereum
3. DefiLlama. "Stablecoin Market Cap Chart, Supply & Peg Data." Retrieved July 31, 2026. https://defillama.com/stablecoins
4. Token Terminal. "Ethereum metrics." Retrieved July 22, 2026. https://tokenterminal.com/explorer/projects/ethereum/metrics/all
5. DefiLlama. "DEX Volume by Chain." Retrieved July 31, 2026. https://defillama.com/dexs/chains?chartKind=dominance
6. Blockworks. "Solana Spot DEX Volume by Pair Category." Retrieved July 22, 2026. https://blockworks.com/analytics/solana/solana-spot-dexs/solana-spot-dex-volume-by-pair-category/
7. DefiLlama. "Solana Stablecoin Market Cap & Supply Chart." Retrieved July 21, 2026. https://defillama.com/stablecoins/solana
8. Solana Compass. "Anza CEO Says SIMD-123, SIMD-550, and SIMD-553 Will All Ship This Year." Retrieved July 22, 2026. https://solanacompass.com/news/anza-ceo-says-simd-123-simd-550-and-simd-553-will-all-ship-this-year
9. CoinGecko. "Bitcoin." Retrieved July 31, 2026. https://www.coingecko.com/en/coins/bitcoin
10. Polymarket. "Fed Decision in September?" Retrieved July 22, 2026. https://polymarket.com/event/fed-decision-in-september-762

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