Bitcoin (BTC-USD) slipped below $118,000 (£87,075) on Thursday during the Asian trading session, as global digital asset markets faced mounting pressure from profit-taking from exchange-traded fund (ETF) outflows.

The world’s largest cryptocurrency by market capitalisation has come under renewed selling pressure as long-term holders lock in gains and spot bitcoin ETFs in the US continue to bleed capital. This confluence of macro and market-specific factors has weighed on prices despite broader demand remaining strong.

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Meanwhile, Tesla (TSLA) reported unrealised gains on its bitcoin holdings in Q2, its first crypto-related earnings boost under new US accounting rules that now allow companies to mark crypto assets to market.

Tesla currently holds approximately 11,509 BTC, purchased primarily in 2021, which are now valued at around $1.2bn following bitcoin’s 30% rally in the second quarter of this year.

Data from Farside Investors showed net outflows from US spot bitcoin ETFs for the third consecutive day. On Wednesday alone, investors pulled $86m from these funds, bringing the week’s total to over $285m.

Not all funds saw redemptions. BlackRock’s (BLK) iShares Bitcoin Trust (IBIT) (IBIT) bucked the trend, pulling in $143m in net inflows. But those gains were outweighed by significant withdrawals from Fidelity’s Bitcoin fund, which lost $227m. Bitwise’s BITB and ARK Invest’s ARKB also saw moderate outflows.

Global head of research at 21Shares Adrian Fritz said bitcoin remains fundamentally well-positioned despite near-term volatility. “After rocketing to a new all‑time high near $123,000 in mid-July, fueled by a technical golden cross and ongoing institutional flows, bitcoin has since been consolidating in a tight range between $115,000 and $120,000,” he said.

“This sideways action, underpinned by aggressive buyer absorption near $115,000, has created a healthy two‑sided liquidity battle.”

“The macro backdrop underpinning these moves has grown even more complex,” he added. “On 4 July, president Trump signed the controversial ‘One Big Beautiful Bill Act’ into law, lifting the US debt ceiling by a staggering $5tn while expanding tax cuts and military spending.”

Although crypto-friendly amendments were left out of the final bill, such as tax relief for staking and airdrops, Fritz noted that the broader implications could still support bitcoin over the long term. “Increased borrowing and fiscal largesse often translate into long-term inflationary pressure and, by extension, stronger demand for hard assets like bitcoin and gold,” he said.