Key Insights:
- U.S. spot Bitcoin ETF saw $395M in net outflows, snapping a four-day inflow streak.
- Bitcoin slid as the U.S.–EU trade tensions heightened geopolitical uncertainty.
- Analysts warn that continued macro stress could push BTC significantly lower.
The US Spot Bitcoin ETF has experienced a sudden wave of redemptions, with roughly $395 million pulled from U.S. spot funds in a single day amid escalating geopolitical tensions.
The sharp outflow, recorded last Friday, snapped a multi-day run of inflows. Besides, it underscored a shift in institutional sentiment as investors moved to lock in profits and de-risk portfolios in the face of mounting macro uncertainty.
Bitcoin price, which had rallied earlier in the week, faltered alongside broader risk assets as geopolitical tensions and trade disputes injected volatility into global markets.
Bitcoin ETF Fund Flow Reverses Track Ending Four-Day Streak
The January 16 withdrawals marked the first significant setback after a week of strong inflows into the Bitcoin ETF. Over the prior four trading days, these funds had attracted about $1.81 billion in new capital, one of the largest weekly hauls on record.
In fact, mid-week saw the biggest single-day inflow of the cycle, roughly $844 million on January 14, as optimism peaked. By week’s end, however, that optimism gave way to caution.
The $394.7 million net outflow on Friday abruptly ended the streak, trimming the week’s net inflow to $1.42 billion (the strongest weekly total since early October).
Data from SoSoValue, a crypto ETF analytics provider, show how quickly sentiment flipped. Tuesday and Wednesday’s hefty inflows were effectively offset by the late-week pullback.
Notably, the outflows were concentrated in a few large funds. Fidelity’s FBTC product – one of the biggest spot Bitcoin ETF , accounted for over half of Friday’s redemptions, with about $205 million withdrawn.
Bitwise’s BITB and ARK 21Shares’ ARKB also recorded notable redemptions, with approximately $90 million and $69 million leaving the funds, respectively.
BlackRock Bitcoin ETF (IBIT) stood apart from the broader trend, posting a modest $15 million in net inflows despite the market pullback.
Profit-Taking Amid Geopolitical Jitters
Market analysts say the renewed outflows from Bitcoin ETF reflect disciplined profit-taking and portfolio risk adjustment rather than disorderly selling.
The pullback followed a sharp advance in bitcoin prices earlier in the month, prompting some institutional investors to reduce exposure and lock in gains as geopolitical uncertainty resurfaced.
Mixed macro signals, from uncertain interest rate outlooks to tightening global liquidity, have fueled a defensive mood, prompting funds to trim exposure to risk assets.
For now, the market strain intensified as international tensions resurfaced. Fresh trade frictions between the U.S. and its allies pushed investors toward a risk-off stance after European officials raised the prospect of retaliatory tariffs in response to recent U.S. measures.
As per the derivatives data, over $844 million in leveraged crypto positions were liquidated over a 24-hour period. Notably, most of the forced exits are coming from long positions.
In this climate, institutional players moved decisively to reduce risk, pulling capital from Bitcoin ETF as a short-term safeguard.
Ethereum ETF Buck the Trend Despite Bitcoin ETF Outflow
In contrast to Bitcoin ETF pullback, Ethereum ETFs have shown resilience, drawing continued inflows even as Bitcoin funds saw redemptions.
On January 16, the very day Bitcoin products bled cash, the US Spot Ethereum ETF still added about $4.6 million in net new money.
That marked the fifth consecutive day of inflows for Ethereum funds, capping a week in which they accumulated roughly $479 million from investors.
This divergence highlights a selective appetite in the crypto market: while some investors took profits on Bitcoin strength, others (or even the same institutions reallocating) continued to favor Ethereum.
Total assets managed by Ethereum ETF actually climbed to around $20.4 billion as of the end of that week, even as Bitcoin ETF assets ticked down. Historically, ETF flows can reverse course as rapidly as they turn negative.