Key Takeaways
- US spot Bitcoin ETFs experienced significant net outflows ($866 million) on Thursday, marking their second-worst day on record.
- This trend follows the conclusion of the 43-day US government shutdown, which failed to boost investor sentiment for crypto-linked funds.
- Despite Bitcoin ETF outflows, the XRP ETF launch outperformed all other ETF launches this year, indicating underlying demand for regulated altcoin funds.
- Industry experts offer differing perspectives on whether the current market downturn confirms a bear cycle, with some suggesting a new market structure is emerging.
- While Bitcoin ETFs saw outflows, Solana ETFs continued their winning streak with inflows, and Ether ETFs experienced outflows.
Bitcoin ETF Outflows Continue Post-Government Shutdown
Demand for Bitcoin and crypto-linked investment funds has seen a continued decline this week, with Thursday marking another significant day of outflows for US spot Bitcoin exchange-traded funds (ETFs).
On Thursday, these ETFs recorded net outflows totaling $866 million. This figure represents the second-worst day for Bitcoin ETF outflows on record, surpassed only by the $1.14 billion in outflows observed on February 25, 2025, according to data from Farside Investors.
This marked the second consecutive day of outflows for Bitcoin ETFs. The recent conclusion of the 43-day US government shutdown, a significant economic event, did not appear to reignite investor appetite for these digital asset investment vehicles.
The outflows occurred just one day after President Donald Trump signed a government funding bill on Wednesday. This legislation provides funding for government operations through January 30, 2026, resolving the prolonged shutdown.
Investor Sentiment and Market Outlook
The persistent lack of demand for Bitcoin ETFs is raising concerns among cryptocurrency investors. These funds were a primary catalyst for Bitcoin’s market momentum throughout 2025, alongside strategies like those employed by Michael Saylor.
💡 Despite these outflows, the broader Bitcoin bull market remains intact as long as the price stays above the critical $94,000 level. Ki Young Ju, founder and CEO of crypto intelligence platform CryptoQuant, noted that this level represents the average cost basis for investors who acquired Bitcoin in the past six to twelve months.
Personally, I do not think the bear cycle is confirmed unless we lose that level. I would rather wait than jump to conclusions, Ju stated in a recent X post on Friday.
In contrast to the cyclical view, some industry observers believe that the traditional four-year market cycle theory may no longer be as relevant. This shift in perspective is attributed to the recent introduction of Bitcoin ETFs and the changes in the US administration.
Hunter Horsley, CEO of asset management firm Bitwise, shared his view in a Thursday X post: Since the launch of the Bitcoin ETFs and new administration, we’ve entered a new market structure.
I think there’s a pretty good chance that we’ve been in a bear market for almost 6 months now and are almost through it.
Horsley added, The setup for crypto right now has never been stronger.
Emerging Altcoin ETFs Show Underlying Crypto Appetite
Despite the outflows from Bitcoin ETFs, the performance of emerging altcoin ETFs suggests there is still underlying investor appetite for cryptocurrencies.
The Canary Capital XRP (XRPC) ETF made its debut on Thursday, becoming the first US-based ETF to hold spot XRP tokens. According to Cointelegraph’s reporting, the launch day volume for this XRP ETF has set a new record.
The XRP ETF’s launch day performance surpassed all other crypto and traditional ETF launches in 2025, indicating a growing demand for regulated altcoin investment products.
Eric Balchunas, a Bloomberg ETF analyst, highlighted the XRP ETF’s success on X, stating, Congrats to $XRPC for $58m in Day One volume, the most of any ETF launched this year (out of 900), BARELY edging out $BSOL’s $57m.
He further commented, The two of them are in league of their own, tho as 3rd place is over $20m away.
In other crypto ETF developments, Ether (ETH) ETFs experienced $259 million in outflows on Thursday. However, the Solana (SOL) ETFs bucked the trend, receiving $1.5 million in inflows and extending their impressive 13-day winning streak, according to Farside Investors data.
Final Thoughts
The cryptocurrency market is exhibiting mixed signals, with significant outflows from Bitcoin ETFs juxtaposed against strong performances from new altcoin ETFs. Market participants and analysts continue to debate the prevailing market cycle and future trends, particularly in light of evolving regulatory and economic landscapes.
