ETF Investors Pull Back From Bitcoin and Ether as Altcoin Funds Break Away
Crypto ETF investors started 2026 by trimming exposure to Bitcoin and Ether, even as appetite for altcoin-linked funds showed early signs of rotation. During the first full trading week of the year, nearly $750 million flowed out of US-listed spot Bitcoin and Ether ETFs, marking a sharp shift in positioning after a strong opening session.
The pullback highlights a familiar pattern at market turning points. Investors are not exiting crypto entirely. Instead, capital is being redistributed as risk preferences evolve.
Bitcoin and Ether(Crypto) ETFs See Heavy Redemptions
Spot Bitcoin and Ether ETFs recorded combined net outflows of roughly $749.6 million between January 6 and January 9, reversing early optimism that briefly lifted flows at the start of the week.
Bitcoin ETFs absorbed the bulk of the selling pressure. Despite attracting close to $700 million in inflows on January 5, the category logged four consecutive days of redemptions afterward, shedding approximately $681 million overall.
Selling accelerated midweek, with January 7 alone seeing outflows of more than $486 million. By the end of the week, even the largest products were not spared. BlackRock’s IBIT, the biggest spot Bitcoin ETF by assets, recorded $252 million in outflows on January 9. Products from Bitwise also saw losses, while Fidelity’s FBTC stood out as a rare exception, posting modest inflows.
Despite the week’s drawdown, Bitcoin ETFs remain structurally significant. The 12 approved funds now manage nearly $116.9 billion in assets, representing about 6.5% of Bitcoin’s total market capitalization. Since their launch in early 2024, cumulative net inflows still exceed $56 billion, underscoring that the recent move reflects short-term positioning rather than a wholesale retreat.
Ether ETFs followed a similar, though less severe, path. The group posted $68.6 million in net outflows for the week after earlier inflows were erased by selling in the final sessions. BlackRock’s ETHA led the redemptions, followed by Grayscale’s ETHE. Collectively, the nine spot Ether ETFs now hold about $18.7 billion in assets, just over 5% of Ether’s market value.
Altcoin ETFs Attract Capital as Rotation Emerges
While investors reduced exposure to Bitcoin and Ether, newer altcoin ETFs moved in the opposite direction. XRP- and Solana-linked products recorded fresh inflows, signaling selective risk-taking rather than broad risk aversion.
Spot XRP ETFs brought in $38.1 million during the week and posted their highest weekly trading volume since launch, reaching $219 million. The pickup suggests growing institutional comfort with the products following their debut in late 2025.
Funds from Canary Capital, Bitwise, and Franklin Templeton continue to dominate the category. Together, XRP ETFs have accumulated more than $1.2 billion in net inflows, with total assets nearing $1.5 billion.
Solana ETFs also gained traction, pulling in $41.1 million over the same period. Bitwise’s Solana product maintains a clear lead, benefiting from investor interest in high-throughput blockchain exposure as capital rotates beyond the two largest cryptocurrencies.
What the Shift Signals
The divergence between Bitcoin and Ether ETFs on one side and altcoin funds on the other points to a maturing market dynamic. Rather than moving in unison, institutional investors are becoming more selective, reallocating capital based on relative value, growth narratives, and risk tolerance.
For now, the early-year pullback in Bitcoin and Ether ETFs appears less like a loss of confidence and more like consolidation after a strong prior cycle. At the same time, steady inflows into XRP and Solana products suggest that institutions are willing to explore broader crypto exposure as the market enters its next phase.
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