Bitcoin and Ethereum ETFs See Strong Inflows as Institutional Buyers Return Cautiously

Bitcoin and Ethereum spot ETFs recorded strong inflows in early 2026 as institutional investors returned to the market. The trend reversed early-year outflows tied to tax positioning, with Bitcoin ETFs attracting $1.42 billion in net inflows during the week of January 12-16. BlackRock's iShares Bitcoin Trust led the inflow surge, capturing $1.035 billion, or 73% of the total.

Ethereum ETFs also saw renewed demand, with net inflows totaling $479 million over the same period. BlackRock's ETHA product led the Ethereum ETF category, bringing in $219 million in inflows.

The inflows coincided with a rise in Bitcoin's price, which climbed above $97,000 for the first time in three months. Ethereum's price also advanced, rising over 5% to around $3,293.

Why Did This Happen?

The return of institutional buyers to Bitcoin and Ethereum ETFs came after a period of cautious activity. Experts attributed the inflows to improved macroeconomic conditions and progress on U.S. crypto legislation, which reduced regulatory uncertainty. Additionally, post-year-end portfolio adjustments and a reduction in short positions contributed to the inflows.

A key factor in the inflow trend was the decline in the number of Bitcoin holders, which has historically preceded price gains. Santiment data showed a drop of 47,244 BTC holders over two months, signaling a potential tightening of supply.

How Did Markets React?

The inflows were accompanied by significant price movements. Bitcoin rose 6.7% over two days, while Ethereum gained over 5%. The rise in prices also led to large short liquidations, with over $360 million in BTC short liquidations reported in the 24 hours following the price surge.

Bitcoin ETF inflows pushed total assets under management across spot Bitcoin ETFs to $128.04 billion, equivalent to 6.56% of Bitcoin's total market value. Ethereum ETFs now hold $20.42 billion in net assets, representing 5.14% of Ethereum's market cap.

What Are Analysts Watching Next?

Market analysts remain cautious about interpreting the recent inflows as a definitive trend. Vincent Liu of Kronos Research noted that while ETF buying and reduced selling by large holders are positive signs, the trend is still developing and requires several weeks of consistent inflows to confirm a lasting shift.

Ecoinometrics also observed that past spikes in Bitcoin ETF inflows have often triggered short-lived price rebounds rather than sustained rallies. Analysts are therefore focusing on the sustainability of inflows, regulatory developments, and broader macroeconomic indicators, including the potential for interest rate cuts.

BlackRock, which dominates the ETF inflow landscape, reported a record $14 trillion in assets under management for the year, driven by strong flows into its ETF and private market platforms. The firm is targeting further growth in private markets, with a goal of raising $400 billion in private market assets by 2030.

The inflows into Bitcoin and Ethereum ETFs also reflect a broader shift in institutional sentiment. With improved risk appetite and clearer macroeconomic signals, investors are reallocating capital into crypto through regulated products. However, analysts caution that sustained inflows and regulatory clarity will be necessary to maintain the momentum.