Bitcoin ETFs: $332M Inflow Breaks Streak Amid Cost Basis Gap

A net inflow of $332.7 million on Tuesday broke a five-day outflow streak for U.S. spot Bitcoin ETFs. This reversal comes after the products shed nearly $1.72 billion in that period, with the broader January trend showing a net outflow of $1.61 billion. The inflow is a positive signal, but it does not change the fact that the ETFs remain in net negative flow for the month.

Bitcoin's price action reflects this mixed sentiment. The asset is up 1.3% to around $78,500, but it continues to trade below its average cost basis for many holders. This creates a key test for buyer conviction, as the inflow ends a streak of outflows that coincided with a selloff over the past fortnight.

The bottom line is that while Tuesday's inflow provides a temporary relief, it is a single day's data point against a larger negative trend. The ETFs are still net out of assets for January, and the price's failure to respond decisively to the flow reversal suggests underlying pressure persists.

The Flow Split and Market Rotation

The divergence in ETF flows on Tuesday was stark. While spot Bitcoin ETFs saw a net outflow of $272 million, spot Ethereum ETFs drew about $14 million in net inflows. This split is part of a broader rotation where capital moves from Bitcoin toward other crypto assets. The pattern suggests investors are not exiting the asset class but are selectively reallocating within it.

This rotation is evident beyond ETFs. On the same day, Bitcoin saw a net inflow of $252.6 million into centralized exchanges, while Ethereum recorded a net outflow of $335 million. The movement of large sums into and out of exchanges often signals active trading or portfolio rebalancing. . The fact that Ethereum saw a major accumulation by a firm like BitMine, which bought 41,000 ETH, highlights targeted buying interest in specific altcoins.

The bottom line is that this flow split indicates a market in rotation, not retreat. Bitcoin ETFs are bearing the brunt of de-risking, likely due to their heightened sensitivity to macro and tech-market stress. At the same time, capital is flowing into assets like Ethereum and XRP, signaling a search for distinct use cases or relative value. This selective risk-taking points to a complex, segmented crypto market.

Catalysts and Risks Ahead

The immediate catalyst for the recent flow reversal is the "clean-slate effect" of a new year. The $697 million inflow on the first trading day of 2026 and a subsequent $332 million on Tuesday show institutions are repositioning. Yet this initial surge is a high bar against which all subsequent flows will be measured, highlighting the volatility in this positioning.

The core risk is the cost basis gap. With the average ETF cost basis at $84,099 versus the current spot price near $78,000, buyer conviction is under direct test. History shows Bitcoin has traded below ETF cost bases before, but sustained outflows from this zone could trigger redemptions that amplify selling pressure. The market is now watching to see if the current inflow is a sustained shift or a temporary reprieve.

The setup is one of heightened sensitivity. Bitcoin ETFs are bearing the brunt of de-risking, growing sensitive to broader macro and tech-market stress. As long as that link holds, flows will remain volatile. The split with Ethereum and XRP ETFs shows capital is rotating, not fleeing. The bottom line is that the market's stability hinges on whether the new positioning can hold against external shocks, or if the cost basis gap will force a painful recalibration.