Meanwhile, Musk’s support for crypto isn’t new. The CEO has been a vocal supporter of Dogecoin (DOGE), with his posts often causing price rallies for the meme coin.
On Tuesday, Bitcoin spot ETFs recorded net outflows, snapping a three-day streak of inflows that had brought in over $1 billion.
With uncertainty surrounding the Federal Reserve’s upcoming policy decision, institutional investors appear to be reducing their exposure in anticipation of increased market volatility.
Institutions Pull Back from BTC ETFs as Fed Decision Looms
BTC spot ETFs saw net outflows of $85.64 million on Tuesday, marking a shift in sentiment among institutional investors just ahead of today’s US Federal Reserve’s latest policy meeting.
Total Bitcoin Spot ETF Net Inflow. Source: SosoValue
The outflows came after three consecutive days of strong inflows, totaling over $1 billion, into these BTC-backed funds. This suggests a pullback as market participants prepare for potential volatility surrounding today’s FOMC announcement.
It can also be seen as a strategic step to avoid short-term losses in the event of an unfavorable policy signal or unexpected market reaction.
Despite the ETF outflows, on-chain data reveals a spike in spot net inflows today. This indicates that while institutional players may be reducing their ETF exposure, they could be rotating capital into direct spot positions, possibly to capitalize on short-term price swings both before and after the Fed’s announcement.
According to Coinglass, BTC’s spot net inflows sit at $9.72 million. When an asset sees spot inflows, the number of its coin or tokens purchased and moved into spot markets has increased, indicating rising demand.
This points to surging accumulation among BTC spot market participants, a trend which can drive price appreciation if buying pressure remains.
Bitcoin Rises on Buyer Strength
BTC trades at $96,679 at press time, noting a 2% surge over the past day. The coin’s positive Balance of Power (BoP) reflects the steady rise in spot buying activity ahead of the FOMC meeting. As of this writing, this is at 0.10.
This indicator measures the strength of buyers versus sellers by comparing the closing price to the trading range over a specific period. When its value is positive, buyers dominate the market, suggesting bullish momentum and upward pressure on an asset’s price.
If BTC demand rockets and market conditions remain favorable post-FOMC meeting, it could climb toward $102,080.
Layer-1 (L1) coin SEI is today’s top market gainer, rocketing by over 36% in the past 24 hours.
This double-digit surge comes amid a spike in network inflow volume, a signal of renewed investor interest and capital movement onto the network.
SEI Rally as Net Inflows Spike
Sei Network has recorded one of the largest net inflows across all chains over the past 24 hours. It ranked fourth in bridged net flows, outperforming major networks like Solana during that period.
According to Artemis, the Sei Network has seen $3 million in bridged netflows in the past 24 hours. In comparison, top network Solana has seen net outflows amounting to $5 million during the timeframe.
The spike in inflows signals growing user activity and possibly rising investor confidence in the Sei ecosystem. Per the data provider, only Arbitrum, Base, and Ethereum saw higher net inflows.
With capital flowing onto the network, the SEI coin has seen a surge in demand, reflected by its climbing Chaikin Money Flow (CMF). As of this writing, this momentum indicator is at 0.22.
The CMF indicator measures how money flows into and out of an asset. Positive readings indicate that accumulation outweighs selling activity among coin holders. On the other hand, when an asset’s CMF is below zero, selling pressure dominates the market.
For SEI, its CMF setup reinforces the narrative that the current rally is backed by strong demand and liquidity.
SEI Defies the Market Slump
The altcoin trades at a four-month high of $0.28 at press time. In fact, amid the broader market’s lackluster performance over the past week, SEI’s price has soared by over 65%.
With inflows climbing and momentum indicators flashing green, SEI could continue to outperform in the near term. If demand remains high, the coin could climb toward $0.36.
A recent Cambridge report confirms that the United States now leads global Bitcoin mining, prompting questions about how China will respond. Though the country has long held an anti-crypto stance, Chinese mining pools have historically controlled a substantial portion of the global Bitcoin hashrate.
The US’s current competitive edge and renewed hostility over trade policy might motivate China to recapitulate. BeInCrypto spoke with representatives from The Coin Bureau and Wanchain to understand what might encourage China to change its stance toward digital assets.
US Overtakes China as Top Bitcoin Mining Hub
The US has firmly established itself as the world’s largest Bitcoin mining hub. A recent Cambridge Centre for Alternative Finance (CCAF) report revealed that the US accounts for 75.4% of the reported hashrate.
Global distribution of Bitcoin mining activity. Source: CCAF.
This newest development confirms a notable reversal of power over Bitcoin mining dominance. China emerged as the world’s leading Bitcoin mining nation as early as 2017, leveraging its extensive mining infrastructure and low electricity costs to contribute upwards of 75% of the global hash rate at one point.
Yet, the country would later crack down on the industry.
China’s Crypto Crackdown
In 2019, the National Development and Reform Commission of China (NDRC) signaled its intention to prohibit cryptocurrency mining by releasing a draft law categorizing it as an “undesirable industry.”
Two years later, at least four Chinese provinces began shutting down mining operations. These crackdowns intensified amid concerns over excessive energy consumption.
However, China possesses a proven capacity to adjust to geopolitical shifts that could jeopardize its economic dominance, and the current environment may present such a challenge.
Has Bitcoin Mining in China Truly Stopped?
Even with China’s official stance toward crypto, mining activity has not stopped within the region. In July 2024, Bitcoin environmental impact analyst Daniel Batten reported that the hashrate within China currently accounts for approximately 15% of the global total.
7/8
Bottom lines: 1. 15%+ hashrate still comes from China
2. If you have 200-500 miners and want to do renewable-energy mining, you’re welcome
3. This is particularly in Inner Mongolia, the Texas of China, which has a lot of wasted renewable power they want to monetize pic.twitter.com/r6QUgmLmjT
“Despite the official ban, the infrastructure is already in place: from offshore mining to cross-border trading hubs. With more global momentum behind crypto adoption and the US taking the lead, China may find itself incentivized to lean in more strategically, even if unofficially,” Nic Puckrin, Co-founder of the Coin Bureau, told BeInCrypto.
China also has a geographical advantage over the United States, especially regarding technological advancements.
Crypto mining, especially for proof-of-work cryptocurrencies like Bitcoin, depends on Application-Specific Integrated Circuit (ASIC) equipment to handle the necessary complex calculations for validation and mining.
China’s position as a top exporter of crypto mining hardware, particularly to the US, gives it a potential advantage should it decide to revive its mining sector.
Puckrin believes that the combination of trade friction and the US’s invigorated push for crypto dominance might be sufficient to make China reconsider its position.
“It’s unlikely China will make a public U-turn on its crypto mining and trading ban anytime soon. However, with US-based miners accounting for higher and higher proportions of Bitcoin’s hashrate, China is bound to be paying attention and may well be quietly reassessing its stance,” Puckrin told BeInCrypto.
However, China has strategies beyond restarting its Bitcoin mining industry to undermine the United States’ dominance.
China’s Nuanced Approach Beyond US Influence
Even though China opposes the widespread use of cryptocurrencies domestically, it may still see value in digital assets to counterbalance the US dollar’s global currency dominance.
Several countries worldwide have either adopted or are considering central bank digital currencies (CBDCs) to strengthen their domestic currencies. China is at the forefront of these developments.
“Despite the ban on Bitcoin mining, China has actively participated in the digital asset space, through initiatives like CDBC research and the digital yuan, or e-CNY,” Wanchain CEO Temujin Louie told BeInCrypto.
In fact, China’s efforts to create a digital yuan are partly driven by its desire to de-dollarize its economy and lessen its dependence on the US dollar.
Louie also suggested that whatever move China makes, it won’t solely base its decision on what the US does or does not do.
That said, China’s decisions about digital currency will, in turn, affect how its position on crypto continues to develop.
“Weakening USD dominance, whether exacerbated or caused by President Trump’s approach to tariffs, may embolden China to be more aggressive in [its] efforts to internationalise the yuan, including the digital yuan, or e-CNY. Any change to China’s broader strategy will be reflected in [its] stance towards crypto,” he concluded.
China’s activity in other areas of international trade already proves how nuanced its policy changes tend to be.
Could China’s Conflicting Crypto Policies Signal a Change?
Aside from its appreciation of digital currencies like the e-CNY, China’s stance on crypto has already proven somewhat contradictory. These discrepancies may fuel the belief that the country might just be willing to revert—or at least soften—its total ban on mining.
A month ago, investment firm VanEck confirmed that China and Russia –two countries particularly burdened by US sanctions– are reportedly settling some of their energy trades using Bitcoin.
Russia and China are settling oil trades in BTC. I’ve heard first hand accounts of similar transactions with Venezuela. Full tankers are settled in BTC on the “grey” market. The U.S. Government crossed the Rubicon in 2022 by seizing Russian assets at the Federal Reserve and… pic.twitter.com/Y8OwJROw9W
“With the US dollar increasingly being used as a political lever –particularly in tariffed economies– other nations are actively exploring alternatives. Indeed, many countries around the world, including China and Russia, are already using Bitcoin as an alternative for trading in commodities and energy, for example. This trend is only going to accelerate as digital assets become a more prominent part of the global economy,” Puckrin told BeInCrypto.
According to Puckrin’s analysis of these indicators, China’s “shadow crypto economy” is projected to expand this year, which could result in a reassertion of its power. This resurgence would be primarily in response to de-dollarization efforts, rather than a reaction to US dominance in mining.
“We’ll likely see this activity ramping up in the near future, especially as more countries use crypto to bypass dollar-dominated systems,” he concluded.
It will remain crucial to interpret China’s intentions, especially regarding cryptocurrency, by observing its actions rather than relying solely on its official statements.
