Bitcoin ETFs Faces Setback as $1.1B Outflows Overwhelm Early Gains

TLDR

• Bitcoin ETFs saw a strong start in 2026 with over $1 billion in inflows during the first two trading days.
• A three-day outflow streak has reversed the early-year gains, with Bitcoin ETFs experiencing a net outflow of $1.128 billion.
• This sudden outflow has raised doubts about the future prospects of Bitcoin’s price and investor sentiment.
• Bitcoin’s price has dropped below $90,000, signaling a shift in market confidence after earlier highs above $94,600.
• Analysts suggest that macroeconomic conditions are tightening risk appetite, contributing to the growing caution in the market.
• The release of the U.S. nonfarm payrolls data is expected to influence future market movements, including Bitcoin’s performance.
• Bitcoin ETF flows have become more volatile, indicating rotation in investor strategies rather than long-term conviction.

Bitcoin ETFs began the year with strong optimism, attracting over $1 billion in the first two trading days. However, recent data reveals a shift in sentiment, as Bitcoin ETFs have experienced a significant outflow. A three-day streak of outflows has largely wiped out early-month gains, casting doubt on the future price prospects of Bitcoin.

Bitcoin ETFs Face a Sudden Outflow Streak

Bitcoin ETFs, particularly the 11 U.S.-listed spot ETFs, have seen a drastic change in investor behavior. After inflows totaling $1.16 billion in the first two trading days of 2026, the ETFs have experienced a net outflow of $1.128 billion. This rapid reversal suggests that the early optimism surrounding Bitcoin ETFs was short-lived.

According to data from Farside Investors, the three-day outflow streak has erased nearly all of the gains made at the start of the year. Analysts have pointed out that this shift highlights the lack of sustained conviction from institutional investors. Vikram Subburaj, CEO of Giottus exchange, noted that the ETF flows indicate “rotation rather than conviction buying.” He added that “macro conditions have also tightened risk appetite” as traders await more positive economic indicators.

Bitcoin Price Drops as Investor Sentiment Shifts

The outflows from Bitcoin ETFs have contributed to a decline in Bitcoin’s price, which dropped below $90,000 after reaching highs of over $94,600 earlier in the week. On Thursday, Bitcoin fell to a low of $89,300, signaling the market’s growing uncertainty. Other cryptocurrencies, including those tied to memecoins and DeFi tokens, have also seen price pullbacks.

This market shift is in line with a broader risk-off sentiment, as investors are becoming more cautious. Analysts predict that market volatility could increase further, with the release of U.S. nonfarm payrolls data on Friday expected to have a significant impact. The report, scheduled for release at 13:30 UTC, will provide insights into the U.S. labor market and could influence expectations regarding Federal Reserve rate cuts and investor appetite for risk assets, including Bitcoin.

Job Data and Its Potential Impact on Bitcoin ETFs

The U.S. December nonfarm payrolls report is expected to show a slowdown in job creation, with an addition of 55,000 jobs, down from November’s 64,000 gain. This data could signal a weaker labor market and support risk assets like Bitcoin. However, if the job market proves resilient, the broader market may remain range-bound.

Iliya Kalchev, an analyst at Nexo Dispatch, pointed out that “a softer U.S. labor backdrop could support risk assets.” He also noted that “resilient employment data may keep crypto and broader markets range-bound into the week’s close.”

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