Bitcoin falls as Tesla reveals crypto profits in Q2 results

Bitcoin Price Slides Amid ETF Outflows and Market Volatility

Bitcoin (BTC-USD) has experienced a slight decline, falling below $118,000 (£87,075) during the Asian trading session. This move comes as global digital asset markets face pressure from profit-taking following exchange-traded fund (ETF) outflows. As the world's largest cryptocurrency by market capitalisation, Bitcoin is encountering renewed selling pressure. Long-term holders are locking in gains, while spot Bitcoin ETFs in the US continue to see capital leaving the market.

Despite this, broader demand for Bitcoin remains robust. The combination of macroeconomic factors and market-specific events has contributed to the current price fluctuations. Investors are closely watching how these dynamics will unfold in the coming days.

Tesla’s Bitcoin Holdings Provide Earnings Boost

Meanwhile, Tesla (TSLA) reported unrealised gains on its Bitcoin holdings in Q2. This marks the first time the company has seen crypto-related earnings under new US accounting rules that allow companies to mark crypto assets to market. Tesla currently holds approximately 11,509 BTC, purchased primarily in 2021. These holdings are now valued at around $1.2 billion following Bitcoin’s 30% rally in the second quarter of this year.

Although Tesla’s overall Q2 earnings fell short of expectations, with revenue coming in at $22.5 billion compared to the expected $22.64 billion, the company’s Bitcoin position provided a positive offset. The unrealised gains from its BTC holdings were included in the financial results, offering a modest lift to its bottom line despite weak automotive sales.

ETF Outflows Continue as Markets Consolidate

Data from Farside Investors indicates that net outflows from US spot Bitcoin ETFs have continued for the third consecutive day. On Wednesday alone, investors withdrew $86 million from these funds, bringing the weekly total to over $285 million. However, not all funds experienced redemptions. BlackRock’s iShares Bitcoin Trust (IBIT) saw $143 million in net inflows, which helped counterbalance some of the losses.

Despite this, significant withdrawals occurred from other major funds. Fidelity’s Bitcoin fund lost $227 million, while Bitwise’s BITB and ARK Invest’s ARKB also saw moderate outflows. This trend highlights the ongoing volatility in the Bitcoin ETF space and the varying performance of different investment vehicles.

Market Analysis and Macroeconomic Factors

Global head of research at 21Shares, Adrian Fritz, noted that Bitcoin remains fundamentally well-positioned despite near-term volatility. After reaching a new all-time high near $123,000 in mid-July, Bitcoin has been consolidating in a tight range between $115,000 and $120,000. This sideways movement, supported by aggressive buyer absorption near $115,000, has created a healthy two-sided liquidity battle.

Fritz also highlighted the complex macroeconomic backdrop. On July 4, President Trump signed the controversial “One Big Beautiful Bill Act” into law, lifting the US debt ceiling by $5 trillion while expanding tax cuts and military spending. Although crypto-friendly amendments such as tax relief for staking and airdrops were excluded from the final bill, the broader implications could still support Bitcoin over the long term.

Increased borrowing and fiscal largesse often lead to long-term inflationary pressure, which can drive stronger demand for hard assets like Bitcoin and gold. Additionally, fresh US CPI data showed an increase in inflation, rising to 2.7% in June from 2.4% in May, further reinforcing this trend.

What’s Next for Bitcoin?

As Bitcoin continues to navigate market fluctuations, the interplay between macroeconomic conditions, institutional flows, and investor sentiment will play a crucial role in shaping its future trajectory. While short-term volatility is expected, the underlying fundamentals and growing institutional interest suggest that Bitcoin remains a key player in the evolving digital asset landscape. Investors and analysts alike will be closely monitoring developments in the coming weeks.