Bitcoin ETFs See Outflows Amid Altcoin Rotation, While Ripple Gains EU Payments Momentum

Bitcoin and Ether ETFs faced a notable outflow in the first week of 2026, with investors pulling nearly $750 million from these funds. This marked a reversal after initial inflows of $700 million on January 5. The outflows were concentrated on midweek sessions, with January 7 seeing the largest single-day drawdown at $486 million.

In contrast, altcoin ETFs experienced a positive shift, attracting fresh capital as investors rotated their assets. XRP and Solana ETFs stood out for their inflows, suggesting a change in investor strategy. These funds posted stronger trading activity compared to their Bitcoin and Ether counterparts.

Despite the outflows, Bitcoin ETFs still hold a significant market presence. The 12 approved funds have $116.9 billion in net assets, representing about 6.5% of Bitcoin's total market capitalization. This highlights the continued interest and investment in Bitcoin despite the recent drawdown.

Ethereum ETFs followed a similar pattern, though on a smaller scale. They recorded a net outflow of $68.57 million after initial inflows of $282.87 million. The total net assets for Ethereum ETFs now stand at $18.7 billion, representing 5.04% of the Ethereum market cap.

Why Did This Happen?

The outflows from Bitcoin and Ether ETFs may be attributed to market conditions and investor sentiment. Bitcoin's recent failure to maintain its recovery above $94,000 led to increased selling pressure. Institutional investors are seeking more stability, especially as the chances of an interest rate cut decline.

The shift to altcoin ETFs indicates a strategic move by investors to diversify their portfolios. XRP and Solana, in particular, attracted new capital, suggesting that investors are looking for potential growth in these alternative cryptocurrencies.

What Are Analysts Watching Next?

Analysts are closely watching the performance of Bitcoin ETFs and the broader market. BlackRock's IBIT, the largest spot Bitcoin ETF by assets, saw $252 million exit on January 9. This highlights the volatility and the potential for continued outflows if market conditions persist.

For Ethereum, the inflows have had a limited impact on its price movement. Despite $115 million in ETF inflows on January 7, Ethereum remains around $3,090. This suggests that the market for Ethereum is becoming more mature and less reactive to short-term inflows.

Ethereum holders are also shifting some capital to projects like Remittix. These projects offer a smaller valuation, a payments-focused use case, and clear upcoming catalysts that appeal to investors seeking stronger upside. This rotation is a response to the slower price action of Ethereum despite strong ETF inflows.

What Are Investors Considering?

Investors are considering a range of factors as they make decisions about their portfolios. The performance of ETFs, market conditions, and the potential for growth in alternative cryptocurrencies are all part of the equation. The recent outflows from Bitcoin and Ether ETFs suggest a more cautious approach, with investors looking for stability and potential growth in altcoins.

The shift to projects like Remittix is also driven by the need for higher growth opportunities. These projects offer real-world solutions and clear milestones, which make them attractive to investors looking for more aggressive returns. The combination of utility and growth potential is a key factor in the decision-making process for many investors.

Investors are also monitoring the broader regulatory landscape, including the proposed US crypto bill, which has raised concerns about financial surveillance and privacy. The potential impact of this legislation on the crypto market is a significant consideration for investors as they evaluate their strategies and allocations.