Crypto Market Crashes as $1 Billion Flees Bitcoin ETFs in Largest Outflow Since November 2025

The cryptocurrency market took a brutal hit on Thursday as the total crypto market capitalization plummeted nearly 6%, with Bitcoin and Ether funds recording a staggering $1 billion in outflows—marking one of the largest single-day capital flight events of the year so far.

Bitcoin ETFs Bleed $818 Million in Record Selloff

Spot Bitcoin exchange-traded funds (ETFs) led the carnage, shedding an eye-popping $817.9 million in a single day. This massive outflow not only exceeded last Wednesday’s $708.7 million exodus but also marked the largest daily withdrawal since November 2025, according to data from SoSoValue.

The crypto bloodbath coincided with broader market turmoil, including a 4% plunge in gold prices after its recent meteoric rally above $5,300 per ounce. Industry insiders are pointing fingers at multiple culprits: fresh tariff threats from President Donald Trump, growing anxiety over AI-related tech stocks, and Microsoft’s shocking 10% share price collapse that sent shockwaves through Wall Street.

January’s Promising Start Turns Sour

Bitcoin funds had already been bleeding for days, with $147.4 million fleeing on Tuesday and another $19.6 million on Wednesday. By Thursday, cumulative weekly outflows had ballooned to $978 million, effectively erasing January’s positive flows and pushing Bitcoin ETF assets into negative territory for the month.

Since mid-January, spot Bitcoin ETFs have recorded approximately $1.1 billion in net outflows, according to SoSoValue data. Despite this dramatic selloff, these ETFs still represent a significant force in the market, holding $107.65 billion in assets under management—accounting for roughly 6.5% of Bitcoin’s total market capitalization of approximately $1.65 trillion.

Altcoins Follow Bitcoin’s Downward Spiral

The negative sentiment spread like wildfire across the altcoin ecosystem. Spot Ether ETFs logged $155.6 million in outflows, while XRP funds shed $92.9 million. Even Solana ETFs, which had seen modest inflows earlier in the week, experienced $2.2 million in withdrawals.

With $16.75 billion in assets under management, Ether ETFs now represent around 5% of the asset’s market capitalization of approximately $330 billion. According to CoinShares, total assets under management in crypto exchange-traded products (ETPs) stood at $178 billion by the end of last week, representing 5.7% of the entire crypto market cap.

Market Cap Crashes Below $3 Trillion

At the time of writing, total crypto market capitalization had cratered to approximately $2.92 trillion—nearly $200 billion wiped out since peaking above $3 trillion just 24 hours earlier. The carnage wasn’t limited to crypto; Microsoft’s market-shaking decline triggered a broader risk-off sentiment across technology and growth sectors.

Blockchain analytics firm CryptoQuant identified high leverage exposure as a critical factor in the crypto downturn. Analyst Darkfost specifically highlighted dangerous leverage positions at the decentralized derivatives exchange Hyperliquid, where a staggering $87.1 million in long positions were liquidated within mere hours—a domino effect that amplified the market’s downward spiral.

Regulatory Developments Offer Silver Lining

Amidst the market chaos, there’s a glimmer of regulatory hope. Valour has launched Bitcoin and Ether exchange-traded products for UK retail investors following the lifting of the Financial Conduct Authority’s ban—potentially opening new capital channels as traditional markets remain volatile.

The crypto market’s wild volatility serves as a stark reminder of the sector’s nascent nature and susceptibility to macroeconomic headwinds, regulatory uncertainty, and leverage-driven liquidations. As institutional and retail investors reassess their risk exposure, the coming weeks will be crucial in determining whether this represents a temporary correction or the beginning of a more prolonged bear phase.

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