The “smart money” appears to be heading for the exit. BlackRock, the largest asset manager in the world, has publicly announced its significant reduction of exposure to cryptocurrency. During this past week, over $1 billion worth of total outflows from BlackRock’s Bitcoin (BTC) and Ethereum (ETH) ETF funds shows a major shift in institutional attitudes toward crypto assets.
The reduction in holdings comes at a time when the overall cryptocurrency markets are under extreme selling pressure and declining investor confidence, and Bitcoin and Ethereum have recently dropped below critical support levels. As a result, traders are now reconsidering their forecasts for both cryptocurrencies towards late 2026.
The Bitcoin Bleed
The bulk of the capital flight was concentrated in the market leader. iShares Bitcoin Trust (IBIT) of BlackRock—often viewed as a bellwether for institutional demand—posted net weekly outflows of approximately $522.4 million. The selling pressure reached a fever pitch on January 21, a day traders are already calling “Red Wednesday,” when IBIT alone hemorrhaged roughly $356.6 million in a single session.
The bleeding didn’t stop there. Additional sell-offs followed later in the week, with $101.6 million exiting on January 23 and $56.9 million on January 20. These figures greatly exceeded the previous period’s modest inflow of $15.1 million, representing a very different distribution pattern. In total, over one-half of a billion dollars had been withdrawn from the fund within only five trading days.
Ethereum’s Exodus
The second-largest cryptocurrency fared no better. Ethereum, which had been attempting to reclaim higher ground, faced a similar wave of liquidation. BlackRock’s iShares Ethereum Trust (ETHA) registered total weekly outflows of approximately $416.6 million.
Like Bitcoin, the heaviest blow landed mid-week. On the 21st of January, ETHA lost nearly $250.3 million, which has been one of the most disappointing individual days since the project first launched.
This was compounded by further declines of $92.3 million on January 20 and consecutive losses of over $44 million on January 22 and 23. A tiny inflow of $14.9 million on January 16 was little more than a drop in the bucket against the tidal wave of selling.
Accelerating the Downturn
In total, BlackRock offloaded about $939 million worth of Bitcoin and Ethereum in a single week. However, they were not alone. These moves were part of a synchronized trend across U.S. spot crypto ETFs, which collectively logged persistent net outflows. Major funds from Fidelity and others also saw redemptions, as hedge funds and family offices appeared to be “de-risking” their portfolios en masse.
While a handful of smaller funds managed to attract capital on isolated days—specifically those tied to altcoins like Solana and XRP—these were outliers. The broad-based selling in the heavyweight Bitcoin and Ethereum products acted as a drag on the entire ecosystem, accelerating the market’s downward trajectory.
The Macro Trigger
According to analysts, a wide variety of macroeconomic influences have led to this market retraction for cryptocurrencies and blockchain technology assets. Essentially, there is a correlation between high volume in ETF sales and a sharp decline in the prices of global risk assets. The combination of several risks is causing investors to withdraw their capital from high-risk assets at a rapid pace: increasing interest rates on U.S. treasury bonds, reduced momentum following recently completed election cycles around the world, and heightened tensions related to geopolitical events.
More specifically, the combination of recent tariffs imposed by the U.S. against various European countries and diplomatic conflicts regarding the ownership of Greenland is alarmed by worldwide financial markets. During this period referred to as “risk-off,” the first class of assets to be divested are speculative investments such as cryptocurrency. The fear index has spiked, and the narrative has shifted from “accumulation” to “preservation of capital.”
Critical Levels Broken
Recently there has been an immediate and technical impact on NFT price. The continued outflow from the British Pound to US Dollar has raised further questions about whether prices are continuing to go down. The result was a breakdown of two key psychological barriers in the crypto market: Bitcoin consolidated above $90,000 and it hit lows of $88,000 in early morning trading hours today.
In addition, Ethereum was not spared from this immediate and technical impact; Ethereum has now fallen below the critical $3,000 mark, which has been heavily defended by bullish Ethereum traders for several weeks. With these support zones broken, technical analysts warn that the path of least resistance remains lower, at least until the institutional bleeding stops. For now, the market is watching the ETF flows closely; until BlackRock and its peers turn the tap back on, the crypto winter of 2026 may get a little colder.
