The celebration for the new year was short-lived for the biggest names in crypto. After a promising start to 2026, U.S. spot Bitcoin (BTC-USD) and Ether (ETH-USD) ETFs have seen a massive reversal, with more than $1 billion exiting the funds since Tuesday. This sudden exit has wiped out almost all the gains made in the first few days of January. According to data from SoSoValue, Bitcoin ETFs alone saw about $1.13 billion in redemptions, proving that the early-year confidence was much more fragile than many had hoped.
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Institutional Giants Retreat from the Market Fog
This billion-dollar drain is part of a larger trend of caution that started after the market reset in late 2025. Investors seem to be reassessing their risks after a volatile period where billions in leverage were wiped out. While July 2025 was a peak for buying, with Bitcoin funds seeing over $6 billion in a single month, the momentum has clearly cooled. Analysts believe this “controlled deleveraging” is a sign that the era of easy money is over, and institutional players are now much more careful about where they park their cash.
Altcoins Anchor the Market amid the Storm
In a surprising twist, not every part of the crypto ETF world is seeing red. While the giants are bleeding cash, funds tracking altcoins like XRP and Solana have managed to stay in the green. These smaller ETFs have seen steady, though smaller, inflows since they launched in late 2025. This suggests that some investors aren’t leaving the crypto space entirely; instead, they are rotating their money into more specific bets rather than sticking with the broader Bitcoin and Ether markets.
Interestingly, the big move out of these funds is happening just as banks and government officials are watching crypto more carefully. The excitement of starting a new year has already faded, and now everyone is focused on whether these ETFs can survive the constant price swings. To stay strong, the people running these funds need to prove that the market can remain steady over the next few months.
Investors can track the prices of their favorite cryptos on the TipRanks Cryptocurrency Center. Click on the image below to find out more.
