$750 million mass exodus! Bitcoin and Ethereum ETFs face a cold start to the year, why is XRP ETF celebrating against the market trend?

The first full trading week of 2026 saw the cryptocurrency ETF market exhibit a dramatic “ice and fire” landscape. According to SoSoValue data, the US spot Bitcoin ETF experienced net outflows of up to $681 million, and the spot Ethereum ETF also saw $68.6 million in funds withdraw, totaling nearly $750 million in losses.

In stark contrast, the spot XRP ETF recorded a net inflow of $38.1 million and hit a weekly trading volume of $219 million, the highest since its launch; the spot SOL ETF also gained a net inflow of $41.1 million. This significant divergence not only reflects a rotation of market funds from large-cap blue chips to specific altcoins but also indicates that institutional investors are making more refined allocation adjustments within the crypto ecosystem. XRP, with its unique compliant status and relative valuation advantages, is becoming a new magnet for capital.

$7.5 Billion Mass Exodus: Crypto ETF Market Faces “Ice and Fire” at Year Start

The start of 2026 did not continue the festive atmosphere of late last year. For Bitcoin and Ethereum, which account for the majority of the crypto market cap, their corresponding spot ETF products are experiencing a notable “funds retreat.” According to SoSoValue statistics, during the first full trading week from January 5 to January 9, a total of 12 US spot Bitcoin ETFs saw net outflows of $681 million. Notably, the outflows were not isolated incidents but occurred over four consecutive trading days, with a single-day net outflow of $486.1 million on January 7, marking the largest “blood loss” day of the week. Although January 5 saw inflows of $697.3 million, this single “opening red” could not offset the subsequent persistent selling pressure.

Focusing on individual funds, industry leader BlackRock’s IBIT faced the largest redemption, with $252 million withdrawn in a single day on January 9. Bitwise’s BITB also experienced a modest outflow of $5.9 million. Amid the bearish environment, Fidelity’s FBTC stood out as an anomaly, recording a net inflow of $7.9 million on the same day, indicating that even in a downtrend, products from different issuers attract varying investor bases. After this wave of volatility, the total net assets of all spot Bitcoin ETFs fell to $116.9 billion, about 6.48% of Bitcoin’s total market cap. Since their launch in January 2024, these products have accumulated net inflows of $56.4 billion, but recent outflows have cast a shadow over market sentiment.

The situation for spot Ethereum ETFs is relatively calmer but not immune to fund outflows. Over the week, nine Ethereum spot ETFs experienced total net outflows of $68.6 million. Their trend shows a typical “high opening, low closing” pattern: inflows of $168 million and $114.7 million on the first two days (January 5 and 6), followed by outflows totaling $351.4 million over the next three trading days, erasing all gains. Notably, BlackRock’s ETHA and Grayscale’s ETHE were the main outflow drivers. Currently, the total net assets of Ethereum ETFs stand at $18.7 billion, accounting for 5.04% of Ethereum’s market cap. Similar to Bitcoin ETFs, Ethereum ETFs are also experiencing the pain of profit-taking or reallocation.

The key data comparison of mainstream crypto ETF fund flows in the first week of 2026

Bitcoin Spot ETF:

• Weekly net outflow: $681 million.
• Key daily outflow: January 7, with $486.1 million.
• Major fund movements: BlackRock’s IBIT withdrew $252 million on January 9; Fidelity’s FBTC had an opposite inflow of $7.9 million on the same day.
• Total size: Net assets $116.9 billion, representing 6.48% of Bitcoin’s market cap.

Ethereum Spot ETF:

• Weekly net outflow: $68.6 million.
• Trend features: inflows in the first two days, large outflows in the last three days.
• Total size: Net assets $18.7 billion, about 5.04% of Ethereum’s market cap.

XRP Spot ETF:

• Weekly net inflow: $38.1 million.
• Weekly trading volume: Record-breaking $219 million (nearly double the previous week).
• Cumulative performance: Since its launch in mid-November 2025, cumulative net inflow has reached $1.22 billion, with total net assets of $1.47 billion, accounting for 1.16% of XRP’s market cap.

SOL Spot ETF:

• Weekly net inflow: $41.1 million.

Why is XRP ETF Standing Out: Capital Rotation or Fundamentals Support?

As the “giant wheels” of Bitcoin and Ethereum turn, market attention naturally shifts to the “small boats” still sailing against the current. In this capital migration, the spot XRP ETF is undoubtedly the brightest star. During the week ending January 9, five XRP ETFs achieved a net inflow of $38.1 million and a trading volume of $219 million, setting a new weekly record since listing. This figure is nearly twice the $117.4 million volume of the previous week and surpasses the second-highest record of $213.9 million set in the week of December 19, 2025. The surge in trading volume often indicates more than just capital inflow; it reflects increased market divergence and trading activity, directly demonstrating asset attractiveness.

In terms of assets under management, Canary Capital’s XRPC, with $375.1 million in net assets, is temporarily leading, followed by Bitwise with $300.3 million and Franklin D. with $279.6 million. Grayscale and 21Shares also hold over $240 million each. Since mid-November 2025, XRP ETFs have accumulated net inflows of $1.22 billion, with total net assets of $1.47 billion, roughly 1.16% of XRP’s total market cap. Although this proportion is still far below Bitcoin and Ethereum ETFs, its growth rate and market attention are not negligible.

XRP’s strength against the trend may be supported by several key factors. First, relative valuation and rebound logic. During the last bull market, XRP was severely pressured due to long-standing litigation with the US SEC, lagging significantly behind other mainstream assets in gains. As the lawsuit made decisive progress in 2025, regulatory clouds cleared, and its valuation recovery potential attracted funds seeking “value pockets.” Second, unique compliance narrative and utility. Ripple’s long-term cooperation with global financial institutions has endowed XRP with a “compliant bridge” image different from other cryptocurrencies, which is a differentiator in the eyes of institutional investors. Lastly, market fund rotation also plays a role. When Bitcoin and Ethereum prices are high and short-term profit-taking is abundant, some risk-tolerant funds naturally flow into smaller, more story-driven assets for higher potential returns. XRP and SOL (whose ETF also saw inflows of $41.1 million that week) are beneficiaries of this rotation.

Technical Battle: Bullish Patterns and Rare ETF Fund Flow Divergence

Focusing on XRP’s own price trend, an interesting and critical technical battle is unfolding. On the daily chart, XRP has formed a classic bullish “inverse head and shoulders” pattern, a potential reversal signal. Currently, the price remains solid above the “right shoulder” support level (around $2.08), keeping the technical structure intact. However, the anticipated upward breakout—strongly surpassing the “neckline” resistance—has yet to occur. This stagnation coincides with the ETF fund inflow data, creating an intriguing correlation.

A detailed timeline analysis shows that from January 6 to 9, XRP experienced a significant correction, which coincided with the ETF weekly inflow dropping to $38.07 million—the lowest since listing. Compared to the peak weekly inflow of nearly $244 million in late November 2025, this inflow has shrunk by about 84%. This suggests that at the critical moment when the price attempts to break key resistance and needs incremental buying support, institutional demand from ETFs has temporarily “fired out.” This does not invalidate the bullish pattern but explains why the breakout is delayed: the inverse head and shoulders pattern requires sustained demand near the neckline, and the ETF fund retreat reduces upward momentum, leading to consolidation.

However, on-chain data tell a different story, revealing another internal market force. While ETF demand cools, long-term XRP holders’ behavior has changed dramatically. Data shows that between January 9 and 10, the net position of holders surged from about 62.4 million XRP to 239.5 million XRP, an increase of nearly 300%. This indicator tracks long-term accumulation behavior, and such a large increase clearly indicates that not short-term traders but steadfast long-term investors are aggressively buying the dip. Their buying effectively offsets the selling pressure caused by ETF fund slowdown, acting as a “ballast” to stabilize the price.

This divergence between short-term institutional fund flows and long-term holder behavior places XRP at a critical juncture. The price is currently compressed between two major supply zones: the first dense zone around $2.14–$2.15, where about 1.88 billion XRP are accumulated at cost; the second, more critical zone at $2.48–$2.50, coinciding with the neckline of the inverse head and shoulders pattern, with about 1.62 billion XRP resting there. To succeed in breaking through, XRP needs the steadfast support of long-term holders and a renewed push from ETF and institutional funds at the right moment, forming a combined force. The current price range is essentially waiting for the next resonance of these two forces.

Capital Rotation Signal: Can Altcoin ETFs Take Over as the New Mainline?

The outflows from Bitcoin and Ethereum ETFs, combined with inflows into XRP and SOL ETFs, sketch a clear picture of “internal capital rotation” in the crypto market. This is not merely sector switching but may contain institutional investors’ expectations and strategic layouts for the next market phase. Historically, each crypto bull market has had its own narrative core—from Bitcoin as digital gold, to Ethereum’s DeFi and NFT summer, to the Layer 1 chain competition in the previous cycle. After Bitcoin and Ethereum achieved unprecedented institutionalization via ETFs, the market is eager to find the next narrative with explosive potential and sufficient market depth.

The approval and successful listing of spot XRP and SOL ETFs provide an institutional foundation for this rotation. They offer traditional capital a compliant, convenient channel to directly participate in these “altcoins” without dealing with complex private key management or unregulated offshore exchanges. Bitwise’s BSOL fund, with $648.1 million in cumulative inflows, leads other SOL ETFs, and Canary Capital’s leadership in XRP ETFs indicates that early movers in these sectors have attracted significant “smart money.” This may be a leading signal, hinting that the next market hot spots and excess return opportunities are more likely to emerge from these assets with ETF products, solid fundamentals, and community consensus.

Of course, this rotation carries risks. Altcoins are far more volatile than Bitcoin and Ethereum, and their ETF sizes are much smaller with lower liquidity, which could lead to larger price impacts during large redemptions. Additionally, the regulatory environment remains complex. Although XRP has made legal progress, the entire crypto sector still faces uncertain global regulation. For investors, this capital rotation is both an opportunity and a challenge. It reminds us that while paying attention to Bitcoin and Ethereum, we should also allocate some focus to other core assets gaining institutional recognition. The next market climax may be driven by new narratives emerging from these assets (such as SOL’s high-performance DeFi or XRP’s cross-border payment compliance network). ETF fund flows are one of the best windows into institutional attention shifts.

In-Depth Analysis: What is XRP ETF?

XRP ETF, short for XRP Exchange-Traded Fund, is an investment fund listed on traditional stock exchanges that tracks the price performance of XRP digital assets. Unlike directly buying and holding XRP, investors buy and sell shares of XRP ETF through stock accounts, indirectly gaining exposure to XRP’s price without handling wallets or private keys. Currently, in the US market, five asset management firms—including Canary Capital, Bitwise, Franklin D., Grayscale, and 21Shares—have launched spot XRP ETFs.

Operational Model and Significance: These ETFs are “spot” type, meaning the issuer must hold actual XRP as the backing assets. This eliminates concerns about counterparty risk or the fund’s net asset value diverging from the actual asset value (premium/discount). The approval and listing of XRP ETFs are milestones, signifying that after Bitcoin and Ethereum, a third cryptocurrency has gained some recognition from US regulators (mainly SEC), integrating into mainstream finance. They provide a compliant investment channel for broader traditional investors, especially institutional entities (like some pension funds and insurance companies) restricted from direct crypto holdings.

Investment Logic and Risks: Investing in XRP ETFs hinges on optimistic views of Ripple’s global cross-border payment network and XRP’s utility as a bridge currency, as well as valuation recovery post-regulatory clarity. However, risks are significant: Ripple’s legal dispute with SEC, though making progress, is not fully resolved; XRP’s centralization is relatively high, with large token holdings by Ripple; its actual scale and speed in cross-border payments remain to be proven. Moreover, as ETFs, their prices are influenced not only by XRP itself but also by fund liquidity, market sentiment, and correlation with other crypto assets.

Evolution of the Crypto ETF Market Landscape: From Bitcoin’s Solo to a Blooming Garden

Reviewing the development of crypto exchange-traded funds, a clear evolution path emerges—from single-asset breakthroughs to multi-asset proliferation, reflecting changes in regulation, market maturity, and investor structure.

First Stage: Long Struggle and Final Breakthrough of Bitcoin Spot ETFs (2013–January 2024). Over ten years, many asset management giants applied repeatedly, but the SEC rejected or delayed approvals citing market manipulation, liquidity issues, and investor protection concerns. Grayscale Bitcoin Trust (GBTC) served as a high-premium alternative. It wasn’t until 2024, under court pressure and market readiness, that the SEC approved over a dozen spot Bitcoin ETFs, marking the “year zero” of crypto being officially accepted into mainstream finance. The entry of traditional giants like BlackRock and Fidelity fundamentally changed the game.

Second Stage: Ethereum ETFs and “Altcoin” ETF Breakthroughs (2024–2025). After Bitcoin ETFs’ success, focus shifted to Ethereum. Following similar but shorter review processes, spot Ethereum ETFs were approved and launched in late 2024 to early 2025. Though initial sizes lagged Bitcoin ETFs, their success established the precedent that “non-Bitcoin crypto assets can also be listed via ETFs.” A real breakthrough occurred in late 2025 when Ripple and SEC litigation saw a turning point, reducing regulatory uncertainty. SEC approved spot ETFs for assets beyond Bitcoin and Ethereum—namely XRP and SOL—opening the “Pandora’s box” and proving that projects meeting specific compliance and market maturity criteria could gain approval.

Third Stage: Diversification and Global Competition (2026 and beyond). We are now at this new stage’s beginning. Market features include: 1. Fund rotation and internal competition: noticeable capital flows among different crypto ETFs, reflecting active institutional allocation. 2. Global expansion: outside the US, Europe, Hong Kong, Canada are actively promoting various crypto ETF products, forming a global competition landscape. 3. Product innovation: potential emergence of basket index ETFs, leveraged/inverse ETFs, or actively managed DeFi yield strategies. 4. Regulatory deepening: as products increase, focus shifts from “approval” to “ongoing regulation,” including custody security, asset audits, market maker behavior standards. The recent strong performance of XRP ETF exemplifies this era of diversification.