Bitcoin ETF Outflows Deepen Amidst XRP ETF's Unexpected Success

Bitcoin ETF Demand Continues to Wane

The demand for Bitcoin and crypto-linked investment funds continued its decline on Thursday, even after the long-awaited resolution of the 43-day US government shutdown. Spot Bitcoin (BTC) exchange-traded funds (ETFs) in the US witnessed net outflows totaling $866 million, marking their second-worst day on record, only surpassed by the $1.14 billion outflow on February 25, 2025, according to data from Farside Investors.

This marks the second consecutive day of outflows for Bitcoin ETFs, suggesting that the end of the prolonged government shutdown failed to reignite investor enthusiasm. The $866 million exodus occurred just a day after President Trump signed a bill to fund the government until January 30, 2026.

Concerns Regarding Bitcoin's Bull Market Persist

The tepid demand for Bitcoin ETFs is causing concern among crypto market participants, as these funds were instrumental in driving Bitcoin's upward momentum throughout 2025, alongside the influence of Michael Saylor’s Strategy. However, according to Ki Young Ju, the founder and CEO of CryptoQuant, a crypto intelligence platform, Bitcoin’s bull market remains intact as long as the price holds above $94,000, which represents the average cost basis for investors who acquired Bitcoin within 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 Friday post on X.

A Shifting Market Structure?

Other market analysts argue that the traditional four-year cycle theory may no longer be applicable, given the introduction of Bitcoin ETFs and the change in the US administration. Hunter Horsley, CEO of asset management firm Bitwise, commented in a Thursday post on X, "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 also stated, "The setup for crypto right now has never been stronger."

XRP ETF Debut Defies Expectations

Despite prevailing concerns about the broader market cycle, the emergence of altcoin ETFs suggests underlying demand for cryptocurrencies remains. The Canary Capital XRP (XRPC) ETF launched on Thursday as the first US-based ETF holding spot XRP (XRP) tokens, as reported by Cointelegraph. The XRPC ETF's initial trading volume surpassed that of all other crypto and traditional ETF launches in 2025, indicating a growing appetite for regulated altcoin funds. Bloomberg ETF analyst Eric Balchunas noted on X, "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. The two of them are in league of their own, tho as 3rd place is over $20m away."

In terms of other crypto funds, Ether (ETH) ETFs experienced outflows of $259 million on Thursday, while Solana (SOL) ETFs recorded inflows of $1.5 million, extending their winning streak to 13 days, according to Farside Investors.