U.S. spot Bitcoin ETFs have experienced another day of significant outflows, continuing a short-term pullback after a strong start to 2026. Recent data shows net outflows of around $399M–$400M on the most recent trading day on Thursday, based on reports, marking the third consecutive session of negative flows.
This follows earlier sessions with outflows like $243M on Tuesday and $486M another day in the streak. BlackRock’s IBIT saw outflows of approximately -$193M. Fidelity’s FBTC contributed significantly with -$121M or larger in prior days, like -$312M in one session. Other funds like Grayscale’s GBTC also saw redemptions.
This comes after an explosive beginning to the year, with over $1.2B in net inflows across the first two trading days, $471M on January 2 and $697M on January 5, pushing cumulative inflows since launch to around $56–57B. The early 2026 surge reflected renewed institutional interest and a “January effect” rebound from late-2025 outflows which hit record levels like $4.57B over November–December amid tax-loss harvesting and price consolidation.
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However, the recent streak of outflows appears to be a normalization or tactical rebalancing rather than a structural shift away from Bitcoin. Analysts note: Flows can remain volatile in the short term as markets consolidate. Bitcoin’s price has pulled back from highs near $94,000 to trade around $90,000–$91,000 as of January 9 data, with levels like $90,583 reported in some snapshots.
Despite the wobble, BlackRock’s IBIT continues to show relative strength in many sessions, and broader institutional demand including new filings like Morgan Stanley’s Bitcoin ETF remains supportive. These outflows are viewed as temporary “healthy consolidation” by many, with the long-term trend still positive for Bitcoin ETFs as a gateway for traditional capital.
The market is watching for stabilization, potential macro catalysts like policy decisions, and whether inflows resume to support any rebound. Policy decisions, particularly in regulation, monetary policy, and taxation, play a pivotal role in shaping Bitcoin’s market dynamics, institutional adoption, and price trajectory.
These influences can either foster growth by providing clarity and legitimacy or introduce volatility through restrictions and macroeconomic shifts. U.S. policies have been a major driver for Bitcoin’s evolution, with recent shifts toward clearer regulations unlocking institutional capital and mainstream integration.
For instance, the anticipated passage of the Clarity Act in the first half of 2026 is expected to define regulations for tokenized assets and DeFi projects, clarifying roles for the SEC and CFTC. This legislation could accelerate institutional adoption by addressing ambiguities that have historically deterred large investors, potentially leading to increased inflows into Bitcoin ETFs and broader market stability.
Similarly, bipartisan crypto market structure legislation projected for 2026 aims to establish rules for registration, disclosure, and asset classifications, enabling on-chain issuance and regulated trading of digital assets. Building on the 2025 GENIUS Act, which regulated payment stablecoins, these moves are seen as integrating Bitcoin more deeply into traditional finance, reducing perceived risks and boosting demand.
The CFTC’s approval of federally regulated spot Bitcoin trading marks a significant policy shift, offering institutions direct market access and regulatory clarity, which could enhance liquidity and position the U.S. as a leader in sound money innovation.
Additionally, the Federal Reserve’s withdrawal of its 2023 policy now permits uninsured banks to engage in crypto activities, potentially sparking a new wave of banking involvement in Bitcoin. However, challenges persist, such as lobbying efforts that might exclude Bitcoin from de minimis tax relief in stablecoin bills, highlighting regulatory capture risks that could disadvantage pure Bitcoin holders.
Under President Trump’s second term, policies are creating a “golden window” for deregulation, with aligned regulators and potential government Bitcoin purchases influencing long-term demand. Proposals to allow tax payments in Bitcoin and eliminate capital gains treatment could reframe it as monetary infrastructure, lowering barriers for holders and altering demand permanently.
Monetary Policy and Inflation Effects
Central bank decisions, especially from the Federal Reserve, directly impact Bitcoin as a risk asset and inflation hedge. In 2026, Fed rate cuts from the current 3.50%-3.75% range could reduce borrowing costs, making non-yielding assets like Bitcoin more appealing and driving institutional inflows through ETFs currently holding about $115 billion in assets.
Accommodative policies, such as liquidity expansion, tend to devalue fiat currencies, positioning Bitcoin as a store of value and fueling price rallies. Conversely, sustained high rates or hawkish stances may tighten liquidity, suppressing valuations and triggering selloffs amid risk-off sentiment.
Inflation data releases, like monthly CPI reports, introduce short-term volatility, with lower-than-expected figures supporting Bitcoin surges by reinforcing rate-cut expectations in late-2025’s 2.7% year-over-year inflation contributed to Bitcoin’s climb above $90,000. Upside inflation surprises, however, amplify uncertainty and correlate with equity market downturns, leading to amplified Bitcoin declines due to its high-beta nature.
Fiscal policies, such as deficits influencing inflation expectations, also affect discount rates for risk assets like Bitcoin. Global policies add layers of influence. For example, the Bank of Japan’s shift toward tightening, 2-year yields breaking 1% has repriced global risk, hitting high-beta assets like Bitcoin during illiquid periods and triggering liquidations.
In the U.S., the 2025 import tax hike drained retail liquidity by $30 billion, stalling risk-on markets including Bitcoin, with potential Supreme Court relief in March 2026 as a catalyst. Energy policies indirectly affect Bitcoin mining, though advancements like proof-of-stake in other networks have mitigated concerns.
These policies collectively drive Bitcoin’s volatility and long-term trends. Positive regulatory clarity has already propelled ETF assets to $130 billion, representing 7% of Bitcoin’s value, and could unlock trillions in institutional capital. Analysts forecast Bitcoin reaching $130,000-$200,000 by year-end, fueled by deregulation and adoption.
However, short-term outflows like the recent ETF redemptions reflect consolidation amid policy uncertainties. If governments treat Bitcoin as a strategic asset, demand could shift structurally, but risks like exclusion from favorable policies or macro tightening persist.
In essence, pro-crypto policies enhance Bitcoin’s legitimacy and scarcity value, while restrictive ones amplify downside risks.