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Why Institutional Bitcoin Demand Is Still Growing Despite ETF Outflows

Market Movers: The Opening Bell

July 27, 2026

Video Transcript

Morning trade.

We are looking at Bitcoin holding on to 65,500 after a whiplash week for investors.

Now spot when ETFs just recorded their lowest full week trading volume since October 2024, and we did see a brutal late week sell-off that saw competitors capital but Grayscale to buck the trend while rival funds suffered outflows.

Gray scales Bitcoin mini trusts captured nearly $86 million in new.

Now the firm is also riding the momentum in Ethereum with the gray scale of the many trusts adding to a winning streak that all these funds outperformed Bitcoin for the second straight week.

So its capital rotates and Wall Street demands more sophisticated tools.

How is the market rewiring its plumbing?

Well here to break it all down for us is crystal Lynch, head of trading and capital markets at Grayscale Investments.

Chris, great to have you here.

Thank you so much for joining me.

Thanks so much for having.

Great to be here.

Well, 2026 has been quite the volatile year, not just for the crypto markets, but all assets across the board.

So when we're looking at the Bitcoin funds that have come to fruition.

Tell us about the mini Bitcoin ETF at grayscale.

Yes, we're really excited about the Bitcoin Mini Trust.

It's the lowest cost or among the lowest cost vehicles for Bitcoin in the world, and we found that that's been a really popular investment for.

People looking to get crypto exposure this year like you alluded to, these products have broadly, the cohort in general, have had outflows this year.

We've seen about $5 billion out in Bitcoin funds collectively, but our Bitcoin mini product has actually had net inflows, and we're very encouraged to see that.

We think that that's indicative that long hold type investors are still very interested in the asset class and looking for that low cost way to express it.

And Christo, we all know that geopolitics have been front and center this year, especially given the conflict between the US and Iran.

And as a result, we all expect these summer months to be fairly quiet, but we all know that this year that hasn't been the case.

So I do want to get your perspective, especially when it comes to hyper liquid ETFs.

So what do you make of what's happening and what is Greyscale doing?

Hyperliquid has been a really positive place in the Alts lineup.

It is our product that we launched a couple of weeks ago, and Hyperliquid has really gotten a lot of attention recently for being the biggest decentralized exchange for perpetual futures.

Now Perpetual futures are basically a traditional future that never expires, and it's become a very.

Popular tool for investors looking to trade things that are not open during US market closures, for example, oil on weekends, especially with all the news out of the Middle East.

Perpetual futures really became a way to express that.

And so hyperliquid, as the token that kind of embodies all of this as that decentralized exchange, has gotten a lot of recent traction, and we're Very excited to bring the largest hyper liquid ETF to market, HYPG, yeah, and I do want to get your take on what we're seeing in terms of crypto options, especially with retirement accounts.

So it does really speak to how far we have come when it comes to the adoption of digital assets.

So when it comes to retirement accounts, tell us what's happening with options.

Yeah, so having the ETF wrapper available for Bitcoin exposure and for other crypto assets has been tremendously helpful for putting it into retirement accounts.

Now it's a way that you can put that crypto asset into traditional rails, and we've seen that manifest not only for spot Bitcoin, but also for income generating strategies that might use options in order to generate yield for investors.

And recently we've also seen.

A lot of popularity for investors with crypto assets in spot form.

So if I held Bitcoin as an example, actually putting that into the ETF so that they can then put that in their tax advantaged accounts or in their retirement accounts.

We've spent a lot of time in the past few months really building out the infrastructure to be able to do that, and we've seen a lot of investor demand from both crypto native investors and traditional investors.

And it is hard to believe, but we are counting down to the final days of the month of July, and that means the Senate recess is coming down the pike.

So when it comes to your conversations with market makers, what are their concerns when it comes to regulatory clarity?

Yes, so Clarity Act is really front and center right now.

We are very optimistic it could still get passed before Congress goes on recess, but that is quickly approaching.

I think the poly market odds right now are about 40% that it passes, so it is dwindling unfortunately, the optimism that it might pass before that recess.

Now we're still very encouraged by the fact that it's even a point of conversation.

If you think back 3 or 4 years ago, I don't think we would have thought such a sweeping bill would be on the table for crypto markets broadly.

So while we are hopeful it could still pass even if it doesn't before recess, it's still a lot of progress for the crypto industry.

Yeah, and I do want to step back and take a look at what we're seeing when it comes to the overall digital asset market because 2026 has been quite the year of institutional adoption, but you do sit at the center, the intersection of ETF liquidity as well as capital markets.

So when you're looking at institutional adoption now compared to say two years ago, what would you say is the single biggest evolution?

I think they're still getting comfortable with it, but we've had a lot of conversations that have spanned months and years, and those are starting to really come to fruition.

So for example, we've gotten our products on many investment advisors' platforms through years of conversations to help them understand the asset class and the product.

I think a lot of institutions are still at the forefront where they're looking at Bitcoin before they get further down into alts, but we are finding that they're getting comfortable with the asset class.

They're investing even though.

Prices might be down.

That's not stopping them from continuing their crypto journey and really getting involved in the space.

Yes, and Krista, finally, before I let you go, it's hard to believe, but we are looking at the second half of 2026, especially since August is right around the corner.

So when it comes to the outlook for crypto at gray scale, what are we looking at in terms of the rest of the year?

So we remain very constructive on crypto as an asset class.

Of course it is more volatile.

It's a risk asset versus some of Or more traditional investments and so it's going to be a little bit rockier of a road, but ultimately we are very positive, very constructive, and I think that these short term headwinds like will Clarity Act pass some of the conflict in the Middle East, will the Fed raise rates, those are all going to have short term impacts, but ultimately long term we still believe very strongly in this asset class.

Well Krista, we will have to leave it there for today, but I appreciate your time.

Thank you so much for joining us today and thank you so much for your insights.

Thanks so much.

Thank you.

Despite another volatile week across financial markets, Bitcoin held above $65,500 as investors navigated geopolitical tensions, shifting Federal Reserve expectations, and changing institutional flows. Spot Bitcoin ETFs recorded their lowest weekly trading volume since October 2024, yet one notable exception stood out, Grayscale Investments. While much of the ETF market experienced outflows, the Grayscale Bitcoin Mini Trust attracted fresh capital, highlighting continued demand from long-term investors seeking low-cost Bitcoin exposure.

In this exclusive interview, Krista Lynch, Head of Trading & Capital Markets at Grayscale Investments, explains why institutional investors continue building crypto allocations despite short-term volatility. She discusses the success of the Bitcoin Mini Trust, the growing role of ETF structures inside retirement portfolios, and why Grayscale believes institutional adoption is accelerating even as market sentiment fluctuates. Krista also shares insights into Grayscale’s expanding product lineup, including the firm’s Hyperliquid ETF (HYPG) and the increasing importance of decentralized perpetual futures markets.

The conversation also explores some of the biggest themes shaping digital assets today, including crypto options strategies, retirement account adoption, regulatory clarity surrounding the CLARITY Act, and how institutional investors are approaching Bitcoin before expanding into alternative digital assets. Krista explains why years of education and infrastructure development are finally translating into meaningful institutional participation.

Looking ahead to the second half of 2026, Grayscale remains constructive on the long-term outlook for digital assets. While macroeconomic uncertainty, Middle East tensions, Federal Reserve policy, and pending U.S. crypto legislation may continue creating short-term volatility, Krista believes the institutional foundation for crypto has never been stronger. As more investment advisers, wealth managers, and traditional financial institutions enter the market, the next phase of digital asset adoption could be driven by long-term capital rather than short-term speculation.

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