The worst two months in US ETF history, institutions quietly turn back after withdrawing 4.5 billion

The US spot ETF has experienced a “winter.” According to the latest news, from November to December, the net outflow of US-listed spot ETFs reached $4.57 billion, marking the worst two-month period in history. Ethereum ETFs saw outflows of over $2 billion, while Bitcoin prices dropped 20% during the same period, reflecting a significant decline in institutional investor interest. Interestingly, by the end of December, this outflow trend suddenly reversed.

The True Picture of the Outflow Crisis

How big is the scale

A net outflow of $4.57 billion is no small figure. It means that within just two months, institutional investors withdrew large amounts of capital from the crypto market via ETF products. The $2 billion outflow from Ethereum ETFs is particularly noteworthy; considering Ethereum’s importance within the ecosystem, this indicates a clear decline in institutional confidence in Ethereum.

The driving factors behind it

The 20% drop in Bitcoin is key to understanding this wave of outflows. When mainstream assets decline sharply, institutional investors’ risk appetite naturally shrinks. Adjustments in market expectations and macroeconomic uncertainties may have driven this withdrawal. This isn’t panic selling; rather, it reflects rational repositioning and risk management by institutions.

The Sudden Sign of Rebound

The turning point on December 31

By the end of December, the situation changed. According to the latest data, the US spot Bitcoin ETF recorded a net inflow of $355 million on December 31, ending a seven-day streak of net outflows. On the same day, Ethereum ETFs also reversed their downward trend, with a net inflow of $67.9 million, ending four consecutive days of outflows.

This is not a minor rebound but a clear shift in direction. When institutions quietly buy at the bottom, it often indicates that the market may be accumulating strength.

Differences among products

BlackRock’s IBIT led the Bitcoin ETF lineup with a net inflow of $143.8 million, followed by Ark 21Shares’ ARKB with a net inflow of $109.6 million. This suggests that different institutional investors reacted differently at the bottom, with larger asset managers sensing opportunities earlier.

The Possibility of a Market Turnaround

Why did institutions suddenly turn back

From a macro perspective, market expectations for 2026 are improving. Analysts believe that the adoption of cryptocurrencies is likely to accelerate, and the regulatory environment will become clearer. These positive outlooks may be attracting institutions to reassess the value of crypto asset allocations.

What to watch for next

The key is whether ETF inflows in January can continue. If inflows keep increasing, then the December 31 rebound is not just a technical correction but a genuine re-entry of institutional capital. If inflows shrink or turn into outflows again, this rebound might only be a short-term bottom bounce.

Summary

From a record $4.57 billion outflow to a turnaround on December 31, US spot ETFs have undergone a rapid shift from crisis to opportunity. This outflow reflects short-term caution among institutional investors regarding risk assets, while the latest rebound signals may suggest a bottom is forming.

It’s important to note that ETF capital flows are often leading indicators of market sentiment. When institutions quietly position at the bottom, it often hints at larger opportunities ahead. However, confirmation from subsequent data is necessary. Monitoring ETF flows in January will be crucial to judging the market’s true turning point.