U.S. Spot Crypto ETFs Record Historic Weekly Outflows as Institutional Risk Aversion Intensifies
The digital asset investment landscape underwent a sharp and decisive transformation during the trading week ending January 23, 2026, as the “New Year rally” was replaced by a wave of aggressive institutional liquidations. Following a record-breaking period of inflows in mid-January that saw over 2 billion dollars enter the market, sentiment turned sharply negative due to a combination of geopolitical friction and looming domestic fiscal uncertainty. By the Friday close, U.S. spot Bitcoin ETFs had recorded a net weekly outflow of approximately 1.46 billion dollars, marking the largest seven-day redemption period of 2026 thus far. This massive withdrawal of capital saw over 16,300 BTC exit the combined funds, led primarily by heavy selling from BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC). This structural de-risking suggests that the “sticky” institutional capital that entered the market earlier in the month was quick to rotate into defensive postures as the odds of a U.S. government shutdown climbed and global trade tensions regarding European tariffs and Greenland reached a fever pitch.
Ethereum ETFs Face Record Redemptions Amid Fading Smart Contract Narrative
The bearish sentiment was even more pronounced within the Ethereum ecosystem, which suffered one of its most challenging weeks since the inception of the spot ETF products. U.S.-listed spot Ethereum ETFs recorded staggering net outflows of approximately 630 million dollars for the week, representing the second-largest weekly redemption on record for the asset class. This localized “exodus” was characterized by three consecutive days of heavy selling between January 20 and January 22, with BlackRock’s ETHA and Grayscale’s ETHE leading the decline. Market analysts suggest that the lack of clear movement on the Digital Asset Market CLARITY Act in the U.S. Senate has left many institutional fiduciaries hesitant to maintain large stakes in Ethereum, particularly as technical support levels near 3,000 dollars failed to hold. The resulting “liquidity drain” has pushed Ethereum’s price toward the sub-2,800 dollar range, highlighting a widening performance gap between the leading smart contract platform and more resilient traditional safe havens.
The Divergence of Solana and XRP as Tactical Capital Seeks High Beta Alternatives
While the two largest cryptocurrencies faced a combined outflow exceeding 2 billion dollars, a notable divergence emerged among the leading altcoin ETFs, signaling a highly fragmented and tactical market environment. In stark contrast to the red ink across the Bitcoin and Ethereum ledgers, spot ETFs linked to Solana and XRP managed to attract modest but significant positive flows throughout the week. Solana funds recorded net inflows of approximately 17 million dollars, while XRP-linked products added roughly 7 million dollars in fresh capital. This divergence suggests that while institutional “macro” traders are exiting the majors due to systemic concerns, a subset of narrative-driven investors is continuing to bet on the continued expansion of the Layer-1 ecosystem and the potential for a favorable regulatory reclassification of XRP in Japan. As the broader market continues to search for a definitive price base, these selective inflows provide a glimpse into the evolving sophistication of the 2026 crypto investor, who is increasingly willing to rotate into niche opportunities even as the “global majors” face intense downward pressure.
