Bitcoin ETFs Record Strongest Inflows in Over a Month at Start of 2026

Crypto ETFs Show Clear Trend Reversal

At the start of 2026, Bitcoin and Ethereum ETFs recorded a significant sentiment shift. On the first trading day of the new year, a total of $646 million flowed into the digital investment products. While Bitcoin ETFs recorded net inflows of $471.3 million, Ethereum ETFs added $174.5 million ^[1].

For Bitcoin ETFs, this marked the largest inflow in 35 trading days. The last comparable figure was reached on November 11, when $524 million flowed into the eleven U.S. funds ^[1]. For Ethereum ETFs, it was the highest inflow within 15 trading days—the strongest figure since December 9, when $177.7 million was registered ^[1].

Tax Effects Weigh on Year-End

The return of demand fits into a typical pattern around the turn of the year. Many U.S. investors had deliberately engaged in tax-loss harvesting at the end of 2025, realizing crypto losses to offset capital gains from the strong stock market year—an effect that can amplify selling pressure in riskier assets ^[1].

Additionally, window dressing frequently occurs in the institutional sector: funds reduce positions before reporting dates that appear unfavorable in year-end statements, emphasizing winners instead. This can put additional pressure on losers in December ^[1].

Historical Strength in First Quarter

Historical data supports the optimistic sentiment at the start of the year. The first quarter ranks among the stronger phases for Bitcoin. Across multiple market cycles, the largest cryptocurrency has averaged gains of around 51.21 percent during the January to March period ^[2].

For Ethereum, the picture is even more striking. The first quarter is historically the strongest of the entire year. On average, Ethereum has gained around 77.4 percent in the first quarter, significantly outperforming Bitcoin ^[2]. A possible reason cited is capital rotation from Bitcoin into altcoins, as this process has historically often followed a strong phase for Bitcoin ^[2].

This development is frequently explained by capital inflows at the start of the year. New allocations from institutional investors, fresh risk capital, and generally positive market sentiment after the turn of the year have repeatedly acted as catalysts in the past ^[2].

Subdued Traditional Markets

The sentiment shift in the crypto sector is also notable because traditional markets have appeared rather subdued at the start of the new year. The major U.S. indices closed mostly only slightly higher on January 2, while gold trended weaker in the first session of the year ^[1].

In this environment, the crypto market can gain across the board. The ETF inflows provide market participants with an additional argument that year-end selling pressure is subsiding and larger players are returning to the market ^[1]. Crypto participants often view these inflows as a sign of interest from major investors ^[1].

Outlook for 2026

Looking at the full year 2026, factors are accumulating that could favor a more friendly market environment. Central burden issues from 2025 have recently weakened. In particular, the prolonged trade conflict between the U.S. and China, which had weighed on both traditional markets and the crypto sector for months, has been largely defused ^[2].

Provided these issues do not escalate again and no new macroeconomic disruptions emerge, 2026 could offer a more constructive environment for risk assets ^[2].