Crypto ETFs Experience Nearly $1B Exodus Amid 6% Market Downturn
January's spot Bitcoin ETF flows have slipped into negative territory following consecutive outflows this week approaching $1 billion, according to data from SoSoValue.
Digital asset investment vehicles experienced substantial withdrawals on Thursday as the overall cryptocurrency market capitalization declined approximately 6%.
Investment products tracking Bitcoin (BTC) and Ether (ETH) witnessed close to $1 billion in redemptions, representing one of the most significant withdrawals recorded so far this year, based on SoSoValue's analysis.
Exchange-traded funds (ETFs) tracking spot Bitcoin drove the exodus, recording withdrawals of $817.9 million, surpassing the previous Wednesday's $708.7 million in outflows and representing the most substantial single-day withdrawal since November 2025.
The cryptocurrency selloff occurred alongside broader financial market weakness, which included gold experiencing a 4% decline following its recent climb beyond $5,300, based on TradingView's market data.
Market analysts attributed the downturn to renewed tariff announcements from US President Donald Trump and anxiety surrounding artificial intelligence technology stocks following Microsoft's 10% share price collapse.
Monthly flows enter negative zone following $1 billion withdrawals
Investment vehicles tracking Bitcoin continued their losing streak throughout the week following consecutive withdrawals, which included $147.4 million on Tuesday and $19.6 million on Wednesday.
By Thursday's close, total weekly redemptions had climbed to $978 million, driving Bitcoin ETF flows into the red for January following approximately $1 billion in additional outflows during the previous week.
In total, spot Bitcoin ETFs have experienced approximately $1.1 billion in net redemptions throughout the current month, based on SoSoValue's tracking data.
Notwithstanding the recent exodus, Bitcoin ETFs continue to represent a substantial market presence. Holding $107.65 billion in assets under management (AUM), these investment products constitute approximately 6.5% of Bitcoin's overall market capitalization of around $1.65 trillion.
Alternative cryptocurrency funds continue bleeding, with ETH and XRP seeing withdrawals
Bearish momentum continued to affect alternative cryptocurrency investment vehicles, with spot Ether ETFs experiencing $155.6 million in redemptions, while XRP (XRP) investment products lost $92.9 million.
Investment products tracking Solana (SOL) recorded comparatively smaller withdrawals of $2.2 million, coming after approximately $10 million in deposits earlier during the week.
Holding $16.75 billion in AUM, Ether ETFs represent roughly 5% of the digital asset's market capitalization of about $330 billion.
Based on a recent report from CoinShares, aggregate AUM across cryptocurrency exchange-traded products (ETPs) reached $178 billion at the conclusion of the prior week, representing 5.7% of the total market capitalization.
As of this writing, aggregate crypto market capitalization measured approximately $2.92 trillion, reflecting close to $200 billion in value destruction since reaching a peak above $3 trillion just one day prior.
In addition to Microsoft's contribution to the wider market selloff, blockchain data analytics platform CryptoQuant identified elevated leverage exposure as a primary catalyst in the cryptocurrency market decline.
CryptoQuant's analyst Darkfost highlighted excessive leverage positions on the decentralized derivatives platform Hyperliquid, noting that $87.1 million in long positions were liquidated in a matter of hours.