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Bitcoin ETFs Attract Billions as Political Pressure on Fed Spurs Bullish Bets
U.S.-listed spot bitcoin ETFs have drawn billions of dollars in investment over the past three months, fueled by mounting political pressure on the Federal Reserve to slash interest rates.
The persistent inflows are forcing traders who were previously hesitant or under-positioned to chase the rally via derivatives, rekindling bullish momentum in bitcoin, 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,” Thielen explained in a client note on Thursday.
“What started as a partisan push has since widened, with figures like Federal Housing Finance Agency director Bill Pulte and Senator Cynthia Lummis also calling for Powell’s resignation over his perceived hawkish stance.”
Trump’s repeated criticism of the Fed has drawn comparisons to Turkish President Recep Tayyip Erdogan’s actions between 2019 and 2021, when Erdogan ousted central bank officials who refused to lower rates, triggering a crash in the Turkish lira and a flight from Turkish assets.
Trump has accused Powell’s resistance to cutting rates of costing the U.S. billions of dollars. Meanwhile, minutes from the Fed’s July 17–18 meeting revealed a growing split among officials over the path forward, with some advocating rate cuts as early as this month and others preferring no changes this year, according to CNBC.
Bulls Rush Back In
The strong flows into bitcoin ETFs and political heat on the Fed are forcing cautious traders back into bullish positions.
“Since mid-April, Bitcoin ETFs have accumulated $15 billion worth of Bitcoin. Remarkably, this buying hasn’t paused, even though bitcoin prices have consolidated since mid-May,” Thielen said. “This steady demand appears to be drawing under-positioned traders back into the market, as derivatives positioning data suggests.”
Traders are piling into call options with strike prices at $130,000, a sign of confidence that bitcoin could soon surpass that level. A call option reflects a bet on higher prices, and demand for these contracts indicates bullish expectations.
This surge in optimism aligns with bitcoin’s historical tendency to perform well in July. Data from Coinglass shows bitcoin has logged gains in eight of the past twelve Julys, averaging over 7% returns for the month.
“Combined with historically strong seasonality in July and potential bullish catalysts from upcoming macroeconomic data and policy developments, the backdrop remains supportive for further upside,” Thielen noted.
Bitcoin recently set a record high, climbing close to $112,000 on some exchanges late Wednesday, per data from CoinDesk.
