U.S. Crypto ETFs See Record $12.8B Inflows Amid Market Rally

Crypto exchange-traded funds (ETFs) in the United States recorded their strongest month on record in July, pulling in $12.8 billion in net inflows as rising token prices and growing regulatory optimism fueled investor demand. The figures, reported by Bloomberg Intelligence analyst Eric Balchunas, surpassed the previous record set in November 2024 when Donald Trump’s election win boosted crypto markets.

July’s surge appears to be driven less by politics and more by fundamentals. The CoinDesk 20 Index climbed over 21% during the month, while Bitcoin rose 7% and set a new all-time high of $122,408. Ethereum also gained traction as broader optimism spread across digital assets.

BlackRock’s iShares Bitcoin Trust (IBIT) led the charge, cementing its position as a dominant player in the sector. IBIT now manages more than $86 billion in assets, eclipsing major equity ETFs such as IVV, which tracks the S&P 500, and IWM, tied to the Russell 2000. Its relatively higher fee structure makes it even more profitable for BlackRock compared to its traditional products.

Investor enthusiasm is expected to grow following a key regulatory shift this week. The U.S. Securities and Exchange Commission approved in-kind creation and redemption for all spot Bitcoin and Ethereum ETFs. This technical change allows large asset managers to swap crypto directly without triggering taxable events or liquidity risks, enhancing efficiency and lowering costs for institutional participants.

The record-breaking inflows highlight how crypto ETFs are becoming a mainstream gateway for investors seeking exposure to Bitcoin and Ethereum. Analysts suggest this could mark the beginning of a new phase in institutional crypto adoption as traditional finance deepens its integration with digital assets.