Bitcoin ETFs Erase Early 2026 Inflows as Risk Appetite Cools

Bitcoin and Ether ETFs have seen over $1 billion in outflows in early 2026, wiping out inflows from the first week of the year. SoSoValue data shows Bitcoin ETFs alone lost $1.13 billion in three days, while Ether ETFs shed $258 million.

The reversal comes after a brief rebound in January, when Bitcoin ETFs recorded $1.17 billion in inflows. The early enthusiasm proved fragile as investors pulled back amid softer market sentiment.

Altcoin ETFs, including XRP, Solana, and Dogecoin, have posted steady inflows. From January 2 to 8, these funds recorded a combined net inflow of about $101.7 million.

Why Did This Happen?

The outflows reflect a cautious market sentiment following the volatility seen in October 2025. During that period, a $20 billion liquidation event triggered widespread deleveraging across crypto markets.

Investor caution is also influenced by the Christmas 2025 outflows, where crypto ETPs lost $446 million. The trend of caution continued into early 2026, with investors trimming exposure as sentiment softened.

How Did Markets React?

Bitcoin ETFs saw their strongest inflows in July 2025, with over $6 billion in monthly inflows. Since then, flows have trended downward, with significant outflows in August and November.

Ether ETFs followed a similar trajectory, with inflows accelerating in July and August before turning negative in November and December. The shift was partly due to the October 2025 correction, which led investors to reassess their exposure.

What Are Analysts Watching Next?

Analysts are keeping a close eye on regulatory clarity and institutional demand as potential drivers of future ETF growth. Grayscale expects improved regulatory clarity and renewed institutional demand in 2026.

The Supreme Court's ruling on Trump's tariffs on January 9 is also a key event to watch. A ruling against the tariffs could create immediate fiscal stress and policy uncertainty, impacting markets.

Investors remain attentive to macroeconomic and policy developments, including potential Federal Reserve interest rate cuts. These factors could influence risk appetite and ETF inflows in the coming months.

Bitcoin ETFs held $117.66 billion in assets as of January 8, about 6.48% of Bitcoin's market cap. BlackRock's IBIT led the outflows with nearly $193.34 million exiting, followed by Fidelity's FBTC and Grayscale's GBTC.

Altcoin ETFs continued to attract inflows, with Solana leading at $50.7 million, XRP at $46.7 million, and Dogecoin at $4.2 million. These funds suggest investors are rotating into niche crypto positions rather than leaving the market entirely.

The early 2026 actions in the ETF market indicate a cautiously evolving market. While prices for Bitcoin and Ether have gained some momentum, investors are approaching allocations with caution. Interest in altcoins continues as an alternative for those seeking exposure to niche areas of the crypto market.