The U.S.-listed spot bitcoin (BTC) exchange-traded funds (ETFs) have attracted billions in investor capital in three months, amid increasing political pressure on the U.S. Federal Reserve (Fed) to cut rates.
The relentless flows are now forcing «under-positioned» traders to chase upside through derivatives, reviving the bullish momentum in the cryptocurrency, according to Markus Thielen, founder of 10x Research.
«The sharp surge in bitcoin ETF inflows since late April 2025 has been primarily driven by political pressure on the Federal Reserve, with Donald Trump openly demanding that Chair Jerome Powell cut rates to 1% and resign. What began as a partisan push has since broadened, with Federal Housing Finance Agency director Bill Pulte and Senator Cynthia Lummis also calling for Powell to step down, criticizing his perceived hawkish stance,» Thielen said in a note to clients Thursday.
Trump’s repeated attacks on the Federal Reserve have revived memories of Turkish President Erdogan’s similar actions between 2019 and 2021, which led to a broad-based shift away from Turkish assets and a crash in the Lira. Back then, Erdogan issued multiple decrees dismissing central bank officials for not cutting rates.
Meanwhile, Trump has repeatedly called for Powell’s resignation, saying his reluctance to cut rates is costing America billions of dollars. The minutes of the Fed meeting held on July 17-18 showed a growing divide over how policy should proceed from here. According to CNBC, Opinions ranged from a «couple» of officials who said the next cut could come as soon as this month to «some» who thought no reductions this year would be appropriate.
Under-positioned bulls re-enter
The relentless ETF flows, combined with growing pressure on the Fed to cut rates, are finally forcing traders, who have been hesitant to commit to bullish trades, to re-enter the market fully.
«Since mid-April, Bitcoin ETFs have accumulated $15 billion worth of Bitcoin, and notably, this buying has continued uninterrupted, even as Bitcoin has consolidated since mid-May. This steady demand now appears to be forcing underpositioned traders back into the market, as suggested by positioning data from the derivatives space,» Thielen said.
Traders have been chasing call options at strikes $130,000, as CoinDesk noted early this week. A call option represents a bullish bet on the market, with the demand for the $ 130,000 call reflecting expectations for a price surge above that level.
These bullish flows are consistent with the positive seasonality typically observed in July. Data tracked by Coinglass shows BTC has put in a positive performance in July in eight out of the past 12 years, with an average gain of over 7%.
«Combined with historically strong seasonality in July and potential bullish catalysts from upcoming macro data and policy developments, the backdrop remains supportive for further upside,» Thielen noted.
Bitcoin hit a record high of nearly $112,000 on some exchanges late Wednesday, according to data source CoinDesk.