Bitcoin plunged sharply from its $96,000 peak at the start of 2026 to around $62,700 by midyear, marking a challenging first half for the cryptocurrency market. Despite intermittent rebounds, the overall trend emphasized persistent bearish sentiment, driven heavily by geopolitical and economic factors.
Recently, however, exchange-traded funds (ETFs) linked to cryptocurrencies recorded their first weekly inflows since May, with figures reaching nearly $282 million. This marks a potential turning point after an eight-week streak of outflows that drained over $7 billion from crypto ETFs. Specifically, about $197 million flowed into Bitcoin funds and $84 million into Ethereum funds, ending a prolonged period of investor withdrawal.
While this inflow hints at renewed buyer interest, the broader context remains cautious. Year-over-year ETF inflows dropped sharply to around $1 billion from their $12 billion peak in late 2025, reflecting diminished enthusiasm. Still, early July’s data suggests the flow of funds out of crypto may be stabilizing, though analysts stop short of declaring a firm market bottom.
Geopolitical tensions, particularly conflicts in the Middle East, exerted significant bearish pressure on Bitcoin during the first half of the year. Even with oil prices surging above $75 per barrel and renewed uncertainty following the pause of an Iran ceasefire, Bitcoin’s price demonstrated relative resilience in the latter months. This stability persisted despite mounting macroeconomic challenges.
Monetary policy also played a role. The Federal Reserve maintained interest rates between 3.50% and 3.75%, signaling no immediate move to ease despite lingering inflation above target levels. This stance dampened risk appetite for cryptocurrencies.
Meanwhile, blockchain security incidents increased by roughly 50% compared to the previous year, totaling 182 attacks in the first half of 2026. However, the financial impact of these exploits declined significantly, with losses dropping from $2.37 billion last year to just under $1 billion, reflecting improved security measures.
Investor behavior also shaped market dynamics. Strategy, a major player, sold approximately 3,600 BTC worth about $216 million to cover preferred stock dividends, intensifying selling pressure in July. This move indicated market participants were still searching for clearer signals of falling inflation before committing more capital.
On a more positive note, the market for real-world assets (RWAs) tokenized on blockchain platforms experienced substantial growth. Total distributed RWA market capitalization surpassed $33 billion, doubling year over year and increasing nearly twentyfold since early 2024. This rapid expansion outpaced stablecoin growth and signals evolving investor interest in diversified crypto-linked assets.