US-listed bitcoin and ether exchange-traded funds (ETFs) suffered sharp redemptions on Thursday, with nearly $1 billion withdrawn in a single session as cryptocurrency prices fell sharply and risk appetite evaporated.
According to data from SoSoValue, 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 to $85,000 and then fell to $81,000 in US trading hours, before approaching the $83,000 mark in Asian morning hours on Friday. Ether fell more than 7% on the day.
BlackRock’s IBIT was hit hardest by 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: Bitwise, Ark 21Shares and VanEck all recorded significant outflows.
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, down from more than $18 billion earlier this month.
The synchronized selling of bitcoin and ether ETFs suggests that institutional investors were reducing overall exposure to cryptocurrencies rather than rotating between assets. This marks a change from early January, when capital inflows into ether funds often offset weakness in bitcoin products.
The sell-off came amid rising volatility in risk assets and renewed uncertainty around US economic policy, with analysts viewing Fed challenger Kevin Warsh as bearish on bitcoin.
Rising implied volatility, weakness in stocks and speculation about the Federal Reserve’s future leadership weighed on sentiment.
At the same time, leveraged positioning in crypto markets unwound aggressively, 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 demand for ETFs to remain fragile, and investors will wait for volatility to cool before jumping in again.
“Bitcoin plummeted to $81,000 on a wave of risk aversion: the Federal Reserve keeping interest rates on hold with no cuts soon, strong outflows from BTC spot ETFs (over $1 billion recently), geopolitical tensions (trade disputes between the US and Europe, the Middle East) and a brief drop in gold and silver,” Andri Fauzan Adziima, research leader at Bitrue, said in a Telegram message.
“This triggered massive leveraged liquidations after breaking key support (~$85,000 100-week SMA), creating a self-reinforcing sell-off in tight liquidity conditions. It is a shakeout of leverage amid macro pressure, not the start of a bear market, with potential for a rebound if supports hold,” Adziima added.
