Key Takeaways

Bitcoin ( BTCUSD ) has sharply reversed this week's upswing, dropping below $65,000 after rising above $71,000 on Monday .

The price reversal began after 10,000 bitcoins that blockchain intelligence firm Arkham Intelligence said are tied to the U.S. government were moved on Monday, pointing to a possible large sale of bitcoin.

Notably, this movement of funds followed pushes by U.S. presidential candidates Donald Trump and Robert F. Kennedy Jr., and U.S. Senator Cynthia Lummis to establish a bitcoin strategic reserve over the weekend.

Shares of Grayscale's Bitcoin Trust ( GBTC ) saw their value drop by more than 10%, largely driven by the spin-off of 10% of the bitcoin held by the ETF to seed a smaller and lower-fee Grayscale Mini Bitcoin Trust. GBTC investors as of July 30, will receive one share of the new ETF for each GBTC share they own.

Despite the recent price drop, spot bitcoin ETFs saw $124.1 million of net inflows on Monday, with BlackRock's iShares Bitcoin Trust ( IBIT ) having $205.6 million of inflows, according to Farside Investors. The spot ether ( ETHUSD ) ETF market continued to suffer from Grayscale Ethereum Trust ( ETHE ) outflows, as $210 million flowed out of the fund on Monday and the spot ether ETFs saw $98.3 million in outflows collectively.

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