U.S.-listed spot Bitcoin and Ethereum exchange-traded funds (ETFs) suffered massive redemptions on Thursday, losing nearly $1 billion in a single day, as cryptocurrency prices plunged and risk appetite evaporated.
SoSoValue data shows that on January 29, investors withdrew $817.9 million from U.S. spot Bitcoin ETFs, the largest single-day outflow since November 20. The Ethereum ETF also experienced sustained selling, losing $155.6 million on the day.
The outflows coincided with a sharp drop in cryptocurrency prices. Bitcoin fell below $85,000 during the U.S. trading session before falling towards $81,000 and was approaching the $83,000 mark in early Asian trading on Friday. Ethereum fell more than 7% on the day.
BlackRock’s IBIT bore the brunt of Bitcoin ETF redemptions, losing $317.8 million. Fidelity’s FBTC lost $168 million, while Grayscale’s GBTC lost $119.4 million. Smaller products were not immune, with Bitwise, Ark 21Shares and VanEck all seeing significant outflows.
The Ethereum ETF follows a similar pattern. BlackRock’s ETHA lost $54.9 million, Fidelity’s FETH withdrew $59.2 million, and Grayscale’s ETH product continued to lose assets. Total Ethereum ETF assets fell to $16.75 billion from more than $18 billion at the beginning of this month.
The simultaneous sell-off in Bitcoin and Ethereum ETFs suggests that institutional investors are reducing their overall cryptocurrency exposure rather than rotating between assets. This marks a shift from early January, when inflows into Ethereum funds typically offset weakness in Bitcoin products.
The sell-off comes amid rising volatility in risk assets and renewed uncertainty over U.S. economic policy, with analysts citing Fed candidate Kevin Warsh as bearish on Bitcoin.
Rising implied volatility, weakness in stocks and speculation surrounding the Fed’s future leadership weighed on sentiment.
At the same time, leveraged positions in the cryptocurrency market were significantly unwound, putting pressure on spot prices.
Currently, ETF flows appear to be tracking price movements rather than leading them. As long as Bitcoin and Ethereum remain under pressure, analysts expect ETF demand to remain fragile, with investors waiting for volatility to cool before jumping in.
Andri Fauzan Adziima, director of research at Bitrue, said in a Telegram message, “Bitcoin plummeted to $81,000 due to a wave of risk aversion: the hawkish Fed maintained interest rates and will not cut rates soon, large outflows from spot BTC ETFs (recently $1B+), geopolitical tensions (US-EU trade disputes, Middle East) and a brief decline in gold and silver.”
Adziima added: “This triggered a massive leveraged liquidation following a break above key support (the 100-week moving average around $85,000), triggering a self-reinforcing sell-off amid thin liquidity. This was a leveraged shock under macro pressure, not the start of a bear market, with rebound potential if support holds.”
