Institutional Exodus: Crypto ETPs Bleed Record $1.7B as Bitcoin Clings to $87K

Liquidity Vanishes at Speed

The institutional bid has evaporated. CoinShares data released Monday confirms digital asset investment products suffered $1.73 billion in net outflows last week, the most severe capital flight since the mid-November 2025 correction. The reversal is absolute: just seven days prior, these same funds celebrated $2.2 billion in inflows.

Markets reacted instantly. Bitcoin (BTC) failed to defend the $90,000 support, sliding to $87,837 (-1.4%) as volume on spot exchanges thinned. The sell-pressure is almost entirely American; U.S.-based funds accounted for nearly $1.8 billion of the withdrawals, while contrarian investors in Germany and Canada bought the dip with modest inflows of $19.1M and $33.5M, respectively.

The Macro Trigger: Shutdown Fears

This isn’t just profit-taking; it’s a risk-off rotation. CoinShares Head of Research James Butterfill cited "fading expectations for interest rate cuts" and frustration over crypto’s decoupling from the "debasement trade."

The elephant in the room is Washington. With the U.S. government funding deadline looming on January 31, Polymarket bettors now price the odds of a shutdown at 78%. The uncertainty has forced a liquidity crunch, with Bitcoin leading the exit (-$1.09B) followed closely by Ethereum (-$630M).

The imbalance suggests defensive positioning rather than a conviction-driven bearish bet… yet the negative sentiment has hit key assets like XRP.

Solana Bucking the Trend

Amid the sea of red, Solana (SOL) remains the outlier. While BTC and ETH bled, Solana investment products attracted $17.1 million in inflows, signaling that institutional allocators are still willing to bet on specific ecosystem growth despite the macro headwinds. Chainlink and Binance-linked products also posted minor positive flows, further highlighting the fragmented nature of this correction.