Crypto ETFs Record Massive Outflows as Macroeconomic Pressures Mount

Record Withdrawals Hit Multiple Crypto ETFs

Cryptocurrency exchange-traded funds faced substantial capital flight on Tuesday, January 20, as investors retreated amid mounting macroeconomic concerns and geopolitical uncertainty. Spot Bitcoin ETFs recorded $483.4 million in daily outflows, while Ethereum products saw $230 million exit, ending a five-day positive streak ^[1].

The Grayscale Bitcoin Trust ETF led Bitcoin outflows with $160.8 million in withdrawals, followed by Fidelity Wise Origin Bitcoin Fund at $152 million ^[1]. Spot XRP ETFs experienced their largest single-day outflow to date at $53.3 million, marking only the second-ever daily capital withdrawal since these products began trading in November 2025 ^[2]. Grayscale's GXRP ETF accounted for $55.39 million of the XRP outflows, partially offset by $2.07 million in inflows to Franklin's XRPZ ^[2].

Solana ETFs stood as the sole exception to the bearish trend, registering $3 million in net inflows ^[1].

Global Macro Factors Drive Risk-Off Sentiment

Market analysts attributed the widespread withdrawals to deteriorating global economic conditions and heightened geopolitical tensions. "ETF outflows point to institutional caution amid geopolitical trade tariffs and broader risk-off sentiment," Vincent Liu, chief investment officer at trading firm Kronos Research, told Cointelegraph ^[1].

The cryptocurrency market downturn coincided with broader financial market stress. The S&P 500 index declined 1.9%, while gold prices surged to a new all-time high around $4,885 per ounce ^[2]. Total crypto market capitalization dropped to $3 trillion from nearly $3.2 trillion, representing a 32% decline from its October 2025 peak ^[2].

Liu identified multiple pressure points affecting global markets, noting that "Japan's bond sell-off and rising JGB yields are tightening global liquidity and pressuring risk on assets" ^[1]. Rising bond yields in both the United States and Japan signaled macroeconomic stress across major economies ^[2].

Trade tensions escalated as President Donald Trump issued fresh tariff threats aimed at convincing Denmark to reconsider its control of Greenland, adding to investor anxiety ^[2].

Cryptocurrency Prices Retreat Sharply

Bitcoin fell below $89,000 after surpassing $97,000 the previous week, while Ethereum traded under $3,000 ^[1]. XRP dropped nearly 1% over 24 hours to trade at $1.90, with an intraday low around $1.89 ^[2]. The token was trading directly on its 200-day Simple Moving Average near $1.90, a critical long-term support level, while remaining well below the 50-day SMA at $2.39 ^[2].

Despite the price decline, larger Bitcoin holders continued accumulating. Addresses holding between 10 and 10,000 BTC added approximately 36,300 coins over the previous nine days, while wallets with less than 0.01 BTC reduced their holdings ^[1].

Shift in Market Control Raises Concerns

A significant compositional change has occurred in Bitcoin's holder base, according to CryptoQuant analyst I. Moreno. For the first time on record, "new whales"—short-term holders controlling more than 1,000 BTC with coins held for less than 155 days—now account for a larger share of Bitcoin's Realized Cap than long-term holders ^[1].

"Control has moved from experienced, cycle-tested holders to capital that entered late in the trend," Moreno wrote, adding that this transition has direct consequences for market behavior ^[1]. Realized Cap measures the value of coins based on their last on-chain movement ^[1].

Looking ahead, Liu indicated that "traders are watching for macro updates on trade tariffs, with attention turning to U.S. Initial Jobless Claims on Thursday, Jan. 22. A weaker print could reinforce growth concerns and risk-off sentiment" ^[1].