Bitcoin ETF Inflows Slow as Macro Uncertainty Drives Risk-Off Sentiment

Bitcoin ETFs recorded $681 million in outflows during the first full trading week of 2026, reflecting a shift in risk appetite among investors according to Cointelegraph. The decline came after a brief rally at the start of the year, when inflows exceeded $470 million on Jan. 2. This trend mirrored Ether ETF flows, which saw $68.6 million in outflows for the week. Market analysts attribute the pullback to fading expectations of Federal Reserve rate cuts and rising geopolitical risks as research indicates.

The decline in ETF inflows highlights broader market uncertainty, as investors adopt a more cautious stance ahead of key macroeconomic data releases. Vincent Liu of Kronos Research emphasized that shifting expectations on monetary policy and global risks have driven a risk-off positioning in crypto markets. He added that traders are now closely watching upcoming US CPI data and Federal Reserve statements for clearer signals on potential rate easing.

Despite recent outflows, Bitcoin ETFs have seen a rebound in inflows, reaching $1.8 billion in the latest week. This marks the strongest inflow since early October 2025. However, total assets under management remain 24% below the Q4 2025 peak, indicating that the recovery is still in early stages.

Why Did This Happen?

Market analysts point to macroeconomic factors as the primary drivers behind the recent pullback in Bitcoin ETF flows according to Cointelegraph. Fading expectations of early 2026 rate cuts by the Federal Reserve have reduced risk appetite among investors. In addition, rising geopolitical tensions have contributed to a more defensive stance in crypto markets.

Vincent Liu of Kronos Research highlighted that traders are waiting for clearer signals from central banks and key economic indicators. The US CPI report and Federal Reserve guidance are seen as crucial in determining the trajectory of Bitcoin ETF flows. Until stronger signals emerge, investors are likely to remain cautious in their positioning.

How Did Markets React?

Bitcoin prices remained near $90,000 as ETF inflows and outflows fluctuated in early 2026 according to Cointelegraph. The asset has rebounded from recent lows, with $1.8 billion in net inflows in the latest week. However, the total assets under management across Bitcoin ETFs have not yet returned to previous highs. Analysts suggest that the current inflows are not sufficient to trigger a sustained price rally without further confirmation of long-term demand.

Ecoinometrics, a Bitcoin macro intelligence newsletter, noted that short-term ETF inflows have historically led to brief price rebounds followed by fading momentum. The newsletter emphasized that Bitcoin requires consistent inflows over multiple weeks to establish a durable uptrend.

What Are Analysts Watching Next?

Analysts are closely monitoring key macroeconomic events, including the US CPI data and potential developments in crypto legislation according to Cointelegraph. The CLARITY Act, which seeks to define how cryptocurrencies will be regulated in the United States, has been delayed in the Senate Banking Committee. This has caused uncertainty among investors and contributed to weaker market sentiment.

In addition to macroeconomic factors, analysts are also watching institutional activity in crypto markets. Bitcoin ETFs have absorbed significant supply in recent weeks, with spot ETFs accumulating approximately 17,700 BTC, or $1.68 billion, in one week. Long-term holders appear to be absorbing volatility, which supports price stability. Funding rates in derivatives markets have also turned positive, indicating renewed confidence.

Structural factors also continue to support Bitcoin ETFs. Bitwise noted that ETF demand has outpaced new Bitcoin supply since the launch of US Bitcoin ETFs in January 2024. Institutional access to crypto ETFs is expected to expand further in 2026, potentially increasing demand for Bitcoin.

Despite the current uncertainty, JPMorgan analysts expect crypto ETFs to see stronger inflows in 2026 compared to 2025. The firm predicted that inflows could exceed $130 billion, driven by institutional adoption and digital asset treasuries.

The total crypto market capitalization has declined slightly, currently standing at $3.23 trillion. However, Bitcoin remains the dominant asset in the market, with a 59.07% share. Ether and other major cryptocurrencies have also seen modest declines in recent weeks.

The next key event for investors will be the US December CPI report, scheduled for release on January 13. The data will provide critical insight into inflation trends and potential Fed policy changes. Until clearer signals emerge, the focus will remain on macroeconomic developments and institutional activity in crypto markets.