U.S.-listed Bitcoin and Ether exchange-traded funds (ETFs) suffered major redemptions on Thursday, with nearly $1 billion withdrawn in a single session as crypto prices fell sharply and risk appetite evaporated.
According to SoSoValue data, investors withdrew $817.9 million from US spot bitcoin ETFs on January 29, the largest daily outflow since November 20. Ether ETFs also saw sustained selling, losing $155.6 million that day.
The outflows coincided with a sharp drop in cryptocurrency prices. Bitcoin fell below $85,000, then slipped towards $81,000 during U.S. trading hours, before approaching the $83,000 mark on Friday morning in Asia. Ether 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 saw an outflow of $119.4 million. Smaller products were not spared, with Bitwise, Ark 21Shares and VanEck all posting significant exits.
Ether ETFs followed a similar pattern. BlackRock’s ETHA lost $54.9 million, Fidelity’s FETH saw an outflow of $59.2 million, and Grayscale’s ETH products continued to bleed assets. Total ether ETF assets fell to $16.75 billion from more than $18 billion at the start of the month.
The synchronized sell-off of Bitcoin and Ether ETFs suggests that institutional investors were reducing overall crypto exposure rather than rotating between assets. This marks a change from early January, when inflows into Ether funds often offset weakness in Bitcoin products.
The selloff occurred amid increasing volatility in risk assets and renewed uncertainty around U.S. economic policy, with analysts viewing Fed nominee Kevin Warsh as bearish on bitcoin.
Rising implied volatility, weak stocks and speculation about the future leadership of the Federal Reserve weighed on sentiment.
At the same time, leveraged positioning in crypto markets has been aggressively rolled back, adding pressure to spot prices.
For now, ETF flows appear to follow price action rather than lead it. As long as bitcoin and ether remain under pressure, analysts expect ETF demand to remain fragile, with investors waiting for volatility to calm down before returning.
“Bitcoin crashed to $81,000 due to a wave of risk aversion: Fed holding rates without any upcoming cuts, large one-time outflows from BTC ETFs (over $1 billion recently), geopolitical tensions (US-Europe trade disputes, Middle East) and a brief decline in gold and silver,” said Andri Fauzan Adziima, head of research at Bitrue, in a Telegram message.
“This triggered massive leveraged liquidations after key support (~$85,000 100-week SMA) was broken, creating a self-reinforcing sell-off in low liquidity. This is a leverage shake-up amid macro pressure, not the start of a bear market, with potential for a rebound if supports hold,” Adziima added.
