The cryptocurrency market faced a sharp downturn as heavy selling pressure hit digital asset investment products, pushing total crypto market capitalization down by nearly 6%. Bitcoin and Ether exchange-traded funds (ETFs) recorded close to $1 billion in combined outflows, marking one of the most significant sell-offs seen so far this year.
According to data from SoSoValue, US spot Bitcoin ETF flows turned negative for January following multiple days of withdrawals. The broader decline came amid global market weakness, with investors reacting to renewed macroeconomic uncertainty and rising risk aversion.
Bitcoin ETFs Record Largest Daily Outflows Since November
Spot Bitcoin ETFs led the downturn, posting $817.9 million in outflows in a single day, surpassing last week’s $708.7 million and marking the largest daily outflow since November 2025. Earlier in the week, Bitcoin funds saw $147.4 million exit on Tuesday and another $19.6 million on Wednesday.
By Thursday, total weekly outflows had reached approximately $978 million, pushing Bitcoin ETF flows firmly into negative territory for January. Overall, spot Bitcoin ETFs have recorded about $1.1 billion in net outflows this month.
Despite the sell-off, Bitcoin ETFs remain structurally important to the market. They currently manage around $107.65 billion in assets, representing roughly 6.5% of Bitcoin’s total market capitalization, which stands near $1.65 trillion.
The crypto market decline coincided with broader asset weakness. Gold prices fell roughly 4% after recently climbing above $5,300, while equities slid following renewed tariff threats from US President Donald Trump and concerns around AI-linked tech stocks. Microsoft shares plunged about 10%, further weighing on overall market sentiment.
Ether, XRP, and Altcoin Funds Extend Losses
Negative sentiment also spread across altcoin investment products. Spot Ether ETFs recorded $155.6 million in outflows, while XRP funds shed $92.9 million. Solana ETFs experienced smaller losses of $2.2 million, following modest inflows earlier in the week.
Ether ETFs now manage approximately $16.75 billion in assets, accounting for around 5% of Ether’s total market capitalization, which is estimated at $330 billion. According to CoinShares, total assets under management across all crypto exchange-traded products (ETPs) stood at $178 billion by the end of last week, representing about 5.7% of the total crypto market cap.
At the time of writing, the overall cryptocurrency market capitalization had fallen to roughly $2.92 trillion, down from above $3 trillion just one day earlier.
Beyond macroeconomic pressures, blockchain analytics firm CryptoQuant highlighted excessive leverage as a major contributor to the downturn. Analyst Darkfost pointed to the decentralized derivatives exchange Hyperliquid, where $87.1 million in long positions were liquidated within hours, amplifying downside volatility across the market.
