Frank Chaparro, “the average investor in BlackRock’s IBIT is now down roughly 40%, after sitting on a 30% gain as recently as mid-2025.”
The dominant view is that investors have rotated capital out of crypto and into tech stocks, microchip manufacturers and companies with AI-industry exposure.
Citing data from economist Torsten Slok, Crucible founder Meltem Demirors
said:
“AI stocks are now 47%, or nearly half of, SPY. ~100 tech firms and a handful of energy tickers generated $6.2 trillion in value this year, the other ~400 companies erased a trillion dollars in market cap. *Everything is computer*”
AI and energy sector market cap growth. Source: Meltem Demirors, X
While the bulk of the crypto market languishes, Wall Street’s
push toward tokenized assets continues to attract capital.
RWA tokenization exceeds $32 billion. Source: Frank Chaparro, X
To date, the distributed asset value of the
real world assets market sits at $30.36 billion, while the represented asset value (RWA tokens using the blockchain as a recordkeeping layer) is $428.78 billion.
Total RWA Value. Source: app.rwa.xyz
It may not be accurate to assume capital outflows from altcoins, memecoins and Bitcoin are going directly into
tokenized real world assets. It is illustrative of the expanding optionality available to investors interested in sourcing yield from assets with better fundamentals and a lower risk premium.
Bitcoin Briefly Lost $60K: Where Does Funding Point?
On July 1, Bitcoin
fell to a 21-month low of $57,800, marking a 33% year-to-date loss but the drawdown was countered by bidders, leading to a series of bounces above $60,000.
By midweek, Bitcoin’s aggregate futures market open interest rose as much as 4% to top $20.86 billion. Rising prices, plus open interest over a multi-day period, hint at a developing trend change. However, BTC’s hot funding rates at 0.228 point to a one-sided market where longs have crowded into positions and are paying a steep premium to stay leveraged.
Bitcoin price, open interest and funding rate. Source: Hyblock
As of July 2, BTC’s cumulative volume delta (CVD) for spot and futures showed $681 million in net buying for the week. Even with buyers stepping in, Bitcoin’s aggregate open interest is still down 45% from its $36.9 billion pre-October 2025 crash high.
Bitcoin spot and futures aggregate cumulative volume delta, 1-week view. Source: Hyblock
According to GSR asset manager Andy Baehr, the
October 10, 2025 market correction was a:
“Very large deleveraging event, nearly $20 billion of liquidations on crypto native perpetual contracts scared away, it was a forest fire, that scared away a lot of leverage in the system and that leverage is very very slow to come back. Markets haven’t rallied to support or draw that back in.”
In light of the early month recovery, Bitcoin’s seasonality data from 2013 to 2025 shows an average 7.51% return in July, which marks the start of Q3.
Bitcoin monthly returns. Source: CoinGlass
Based on the current data and market performance, retail traders are fearful, but have stopped selling ETFs, while leveraged institutional players are crowding the long side.
The general mood leans toward cautious long positioning. This is a fragile situation where a single macroeconomic or geopolitical event could tip the scale and trigger a violent response in crypto markets.
Ethereum, The Quiet Mover
Ether is the overlooked quiet star of the week. Ether’s spot and futures cumulative volume delta for the past 7-days show aggressive accumulation, consistent with institutional buying into weakness. The buying was almost entirely futures driven with a +$1.64 billion net futures delta versus roughly $40 million spot.
Ether spot and futures aggregate cumulative volume delta, 7-day view. Source: Hyblock
Ether’s open interest also surged across the week, rising nearly 15% from $9.53 billion to over $11 billion by July 3, another sign of leverage entering the market. Similar to Bitcoin, ETH’s high funding rate and traders’ long bias in perpetual futures highlight a tricky situation. Holding may become dependent upon consistent futures and spot buy side flows — or upon the price staying above $1,700 if open interest and funding pull back to their median range.
What’s On The Radar?
- Markets remain caught between institutional accumulation and slowing retail capitulation. Will retail traders re-enter crypto markets or will the leverage driven rally fizzle and crypto majors follow?
- Ether was the quiet mover last week. Is this the start of a narrative rotation away from Bitcoin’s macro-driven risk?
- June FOMC comments and future statements from Fed Chair Warsh may impact the budding narrative that the Fed’s current view is hawkish.
- Extended weakness in AI-related equities could continue to spill over into crypto markets.
- On July 2 - 3, Spot Bitcoin ETF flows turned positive with a $220 million inflow, a break from 10 consecutive days of outflows. Will the buying trend continue through this week?
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