7 Consecutive Weeks of Massive Inflows on Senate Passage of CLARITY Act… Will Bitcoin Overcome Macro Headwinds to Hit $140,000?

▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©Coinreaders

Riding the wave of massive regulatory easing from the U.S. Senate, Wall Street institutional funds have flowed in at an astounding pace, enabling the Bitcoin (BTC) spot ETF market to achieve a record-breaking seven consecutive weeks of net inflows. Immediately after the U.S. Senate Banking Committee passed a key bill to remove legal uncertainties in the cryptocurrency market, a massive sum of $131.32 million poured in within a single day. The previously stagnant market sentiment reversed instantly, becoming the driving force that pushed the price above $80,000.

According to investment media outlet TradingNews on May 15 (local time), the U.S. Senate Banking Committee passed the CLARITY Act, a U.S. cryptocurrency market structure bill that clearly classifies Bitcoin as a federal digital commodity, by a vote of 15 to 9. On the day this news broke, BlackRock's iShares Bitcoin Trust (IBIT) alone saw net inflows of $144.11 million, leading the overall market's upward trend. Conversely, a clear phenomenon of institutional funds concentrating into a few flagship products with brand recognition and scale was observed, with $31.64 million exiting Grayscale's GBTC and $14.13 million exiting Franklin Templeton's EZBC.

This inflow of funds is deeply significant as it represents meticulous and planned accumulation by institutional players, rather than one-off speculative forces. Including this week's net inflows, the cumulative funds in spot ETF Complex over the past seven weeks amount to approximately $3.4 billion, successfully continuing the $2 billion performance seen in April. Driven by this sustained capital inflow, the BTC price recorded a sharp increase of 17.6% during the period, from around $68,000 to breaking $80,000 intraday, and is currently consolidating below the strong technical resistance level of the 200-day Exponential Moving Average (EMA) at $82,000.

BlackRock's IBIT, which currently completely dominates the spot ETF market, has surpassed $66 billion in cumulative net inflows, widening its lead over competitors by several multiples. IBIT's average daily trading volume reaches 39.37 million shares, providing unparalleled liquidity that allows large institutional investors to build substantial positions without market shock. Furthermore, Fidelity's FBTC firmly holds the second position with stable fund inflows, and new entrants like Morgan Stanley's MSBT are joining, leading to a diversification of funds centered in the U.S. The outflow of $14.4 million from short Bitcoin products during the same period, the largest this year, also suggests that institutions have closed their bearish hedge positions and are transitioning to a full long-side view.

Looking at the global asset market as a whole, the total assets under management (AUM) in the virtual asset ETF market have swelled to $160 billion, with the U.S. leading inflows with $776.6 million, joined by European funds from countries like Germany and Switzerland. In addition to Bitcoin, selective institutional investments continued with inflows of $77.1 million into Ethereum spot ETFs, $47.6 million into Solana spot ETFs, and $39.6 million into XRP (Ripple) spot ETFs, respectively. Leading experts, including Citi Bank, maintain a conditional long-term outlook that BTC could rise to $143,000 if the CLARITY Act is ultimately signed into law, and Polymarket forecasters are also optimistic, pegging the probability of the bill's final passage this year at up to 73%.

However, the macro environment continues to act as a formidable resistance. With the U.S. 10-year Treasury yield hitting a new annual high of 4.598% and the 30-year long-term Treasury yield surging to 5.12%, financial markets, including the CME FedWatch, have readjusted the probability of an additional Fed rate hike this year to over 40%. Although BTC temporarily dipped below $80,000 due to this macro pressure, the fear of inflation, exemplified by a 3.8% Consumer Price Index (CPI) and a 6% surge in the Producer Price Index (PPI), has paradoxically highlighted Bitcoin as a non-sovereign store of value and a hedge asset, supporting ETF inflows in a strange coexistence.

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