ETF Market Registers Highest Inflows So Far This Year As Bitcoin Notches $97k

Bitcoin surged to a two-month high of $97,000 in early January 2026, driven by renewed institutional interest and favorable macroeconomic conditions. The rally coincided with strong inflows into U.S. spot Bitcoin ETFs, which added $753.7 million on January 13 alone, marking the largest single-day inflow since October 2025.

The ETF inflows reflect broader institutional confidence in Bitcoin as a diversified asset, supported by improving inflation data and stabilizing corporate earnings. Fidelity's FBTC, BlackRock's IBIT, and Bitwise's BITB led the inflows, with Fidelity's product recording $351 million in net flows.

Bitcoin's price has remained above the 50-day EMA, reinforcing the bullish trend. The move above $95,000 also triggered a wave of liquidations of short positions, with nearly $800 million in crypto positions closed in the past 24 hours.

Why Did This Happen?

Regulatory clarity has played a key role in the recent rally. The proposed Digital Asset Market Clarity Act is seen as a major catalyst, offering a clearer legal framework for crypto assets and reducing uncertainty for institutional investors. The bill, currently under review in the Senate Banking Committee, could classify certain altcoins like XRP and Solana as non-ancillary assets, similar to Bitcoin.

Institutional players have also been active in expanding their crypto holdings. Morgan Stanley filed for its own spot Bitcoin and Solana ETFs on January 6, 2026, becoming the first major U.S. bank to seek its own spot Bitcoin ETF. This move signals a broader acceptance of crypto in traditional finance and is expected to attract more institutional capital.

How Did Markets React?

The surge in Bitcoin ETF flows is part of a broader trend of institutional rebalancing after year-end tax-loss harvesting. This has led to a significant shift in asset allocation, with investors rotating into risk assets like Bitcoin amid improving macroeconomic conditions.

Bitcoin's performance has been supported by a combination of factors, including improved inflation data and a more stable economic outlook. The CME Group's FedWatch tool indicates growing expectations for a rate cut in 2026, which has further fueled risk-on sentiment.

The rally has also spilled over into the broader crypto market. Altcoins like XRP and Solana have seen renewed inflows, with XRP ETFs recording $15 million in inflows on January 14. This broad-based participation suggests a more balanced market environment compared to previous speculative cycles.

What Are Analysts Watching Next?

Market participants are closely monitoring the sustainability of the current inflow trend. Marcin Kazmierczak, co-founder of RedStone, noted that ETF flows have become more volatile, with elevated interest rates keeping the opportunity costs high for non-yielding assets like Bitcoin.

The next key level for Bitcoin is $98,500, where a rejection could see a retest of $95,000. A clean break above $98,500 would indicate a stronger bull case, with the path to the psychological $100,000 level appearing open.

Analysts are also watching for any shifts in macroeconomic conditions, particularly the outcome of the U.S. Supreme Court's ruling on President Donald Trump's tariffs. An adverse ruling could trigger volatility, while a favorable outcome might reinforce trade tensions and position crypto as a hedge against global economic instability.

The broader market is also watching for further regulatory developments. The proposed Clarity Act is expected to bring much-needed clarity to the legal status of various crypto assets, which could further attract institutional capital to the sector.

Bitcoin's rally has also drawn attention from major institutional players. Bitmine, a publicly traded Ethereum treasury firm, has been aggressively accumulating ETH, with holdings reaching 4.168 million tokens. The company is seeking shareholder approval to increase its authorized shares, which would allow it to continue its ETH accumulation strategy.

The combined impact of ETF inflows, institutional buying, and regulatory clarity is creating a more mature and liquid market for crypto assets. As more traditional investors enter the space through regulated vehicles, the crypto market is becoming more integrated with global financial systems.