US spot Bitcoin exchange-traded funds (ETFs) drew their largest daily inflow since May after a weaker-than-expected jobs report eased rate-hike concerns and helped the digital asset recover from a fresh bear-market low earlier in the week.
The funds recorded $223 million in net inflows on Thursday, ending a 10-day stretch of withdrawals that had drained $2.73 billion from the products, according to SoSoValue data.
The reversal came as Bitcoin briefly climbed back above $62,000 after falling below $58,000 earlier in the week, its lowest level in 21 months.
The return of ETF demand gave Bitcoin a measure of relief after weeks of pressure from fund redemptions, rising real yields and concern that the Federal Reserve could keep monetary policy tighter for longer.
Still, the one-day inflow only partly offsets the scale of recent selling. Bitcoin ETFs have recorded nearly $8.5 billion in net outflows since early May, according to Santiment.
Bitcoin ETFs Outflow (Source: Santiment)
That leaves the market trying to determine whether this recent inflow marks the start of renewed demand or a short-term rebound after a crowded selloff.
Some analysts view extended outflows as a sign that weaker holders have already reduced exposure, but the market has yet to show that buyers are willing to return for more than a single session.
Payroll slowdown eases rate pressure
The labor report gave investors a reason to reassess the timing of the Fed’s next move.
US employers added 57,000 jobs in June, roughly half of what economists had expected. The Bureau of Labor Statistics also revised April and May payrolls lower by a combined 74,000 jobs, weakening what had appeared to be a more resilient hiring trend.
The unemployment rate slipped to 4.2%, but the decline came as the labor force shrank. About 720,000 people left the labor force in June, pushing the participation rate down to 61.5% from 61.8%.
The household survey also showed employment falling by 507,000, adding to signs that the headline unemployment rate understated the extent of the slowdown.
Hiring was concentrated in a narrow group of sectors. Education, health care and social assistance added 69,000 jobs, more than the overall increase in payrolls. Leisure and hospitality payrolls declined, missing expectations for seasonal hiring tied to global sporting events, while government payrolls rose by just 8,000.
While the report did not point to broad job destruction, it showed a labor market losing momentum.
Rick Rieder, BlackRock’s chief investment officer of global fixed income, described the US jobs report as “more fizzle than fireworks,” saying the broader picture still suggests gradual cooling rather than a sharp break in employment.
According to him:
“One month's payroll report rarely defines a trend. Looking across the broader labor market, we continue to see an economy that is cooling gradually, not one experiencing widespread job destruction. Stability, more than strength or weakness, remains the defining characteristic of today's labor market.”
For Bitcoin, the details were enough to ease immediate macro pressure. The asset had struggled as markets priced in higher funding costs, a stronger dollar and tighter financial conditions. A softer labor report reduced the urgency of that trade, allowing risk assets to recover.
Markets push Fed hike bets later
The jobs report arrived as investors were already reassessing the Fed’s policy path after Chair Kevin Warsh avoided giving a clear signal on the timing of the next rate increase.
Warsh has continued to stress the Fed’s goal of returning inflation to its 2% target, with price pressures still elevated after years of above-target inflation. Tariffs and the recent US-Iran war have added to the inflation debate, keeping policymakers cautious even as some growth indicators soften.
The June labor data gave markets room to push back expectations for additional tightening. Traders are no longer fully pricing a 25-basis-point hike in October, although expectations for another increase by year-end remain in place.
Tuan Nguyen, an economist at RSM US LLP, said the data gives the Fed room to leave rates unchanged at its July meeting. He added:
“We think this job report is enough to keep the Fed on hold at its July meeting. Looking ahead, there is more room for the economy to grow as headwinds continue to subside.”
That repricing helped ease pressure across rate-sensitive assets. The dollar weakened, the two-year Treasury yield slipped to about 4.11%, and gold extended its rebound after earlier declines.
Ole Hansen, head of commodity strategy at Saxo Bank, said lower energy prices, easing inflation expectations, softer yields, and a weaker dollar have helped stabilize precious metals.
Bitcoin benefited from the same shift. Higher interest rates tend to reduce demand for speculative assets by increasing the appeal of cash and short-term government debt.
A delay in expected rate hikes gives Bitcoin more room to recover, particularly after a selloff that forced leveraged traders out of the market.
However, the macro relief does not remove the Fed risk. Wage growth remains above the central bank’s inflation target, and policymakers may still prioritize price stability if inflation proves sticky.
But the labor report eased immediate pressure on markets and provided Bitcoin with a catalyst after weeks of defensive positioning.
Bitwise Europe said investor stress remains elevated, with only 47% of Bitcoin supply held at a profit and aggregate paper losses of about $281 billion. The firm also noted that realized losses have declined with each successive move lower, suggesting that selling pressure may be easing near current levels.
However, the firm noted that options positioning could still amplify volatility. Negative gamma concentrations around $60,000 and $55,000 may reinforce downside moves if Bitcoin loses momentum, while positive gamma near $62,000 could help dampen swings and keep the asset pinned near that level if buyers remain active.
Apart from that, BTC's technical signals are also mixed. Crypto research firm 10x Research said Bitcoin has moved above its seven-day moving average, a short-term positive signal, but remains below its 30-day moving average, leaving the broader trend under pressure.
Exchange-flow data adds another source of caution. Earlier this week, Bitcoin’s decline below $58,000 coincided with heavier transfers to trading platforms, including moves by larger holders.
While such transfers do not always lead to immediate selling, they increase available supply on exchanges during fragile market conditions.
For now, the market has moved from stress to stabilization. The jobs report softened the rate-hike debate, ETF investors returned after nearly two weeks of withdrawals, and Bitcoin reclaimed the $60,000 level.
The next test is whether the inflows continue. A second wave of ETF demand would strengthen the case that investors are treating the drawdown as an entry point. However, a quick return to outflows would leave the recent inflow move looking more like a rate-driven relief rally than the start of a durable recovery.
