XRP Spot ETFs Turn Negative: The First Outflow Since Launch Signals Broader Crypto ETF Weakness

XRP [XRP$2.12 24h change:-0.14% Market cap:$128.44B 24h volume:$103.46M]( spot ETFs experienced their first daily outflow of $40.7 million on January 7, marking a significant shift after weeks of consistent investor inflows since their debut. The reversal coincided with a broader pullback across the entire crypto ETF landscape, as Bitcoin [BTC$96.87K 24h change:+1.78% Market cap:$1935.05B 24h volume:$1.53B]( and Ethereum [ETH$3.37K 24h change:+1.90% Market cap:$406.36B 24h volume:$772.48M]( products also logged substantial redemptions during the same trading session.

A Momentum Break in XRP ETF Inflows

The outflow represented a critical pivot point for XRP exchange-traded products, which had enjoyed an uninterrupted accumulation phase spanning roughly 6-7 weeks from mid-November 2025. Prior to this reversal, the funds had accumulated approximately $1.2 billion in net inflows, establishing strong institutional interest. As of the latest data, total assets under management for XRP ETFs remain robust at over $1.5 billion, indicating that the single-day outflow may reflect profit-taking rather than wholesale abandonment.

The 21Shares XRP ETF bore the brunt of the redemption pressure, recording $47.25 million in outflows. Competing products from Bitwise, Canary, Grayscale, and Franklin remained relatively stable, with most showing flat to modest positive flows. This selective pressure suggests that investor positioning remains mixed despite the overall asset base remaining substantial.

XRP’s price action reflected this market uncertainty. The token had surged 13% earlier in the week, reaching $2.40, but retreated 6.27% on the outflow day to $2.10. As of the latest update, XRP trades at $2.12 with minimal daily fluctuation, suggesting some stabilization following the initial selloff.

The Broader Crypto ETF Landscape Shows Volatility Pattern

The weakness in XRP flows did not occur in isolation. The entire crypto ETF ecosystem demonstrated a pronounced cyclical pattern throughout early January 2026. Bitcoin spot ETFs illustrated this dynamic vividly: after logging $471 million and $697 million in inflows on January 2 and 5 respectively, they reversed sharply with $243 million in redemptions on January 6, escalating to $486 million on January 7.

Ethereum’s trajectory mirrored this pattern. ETH products initially pulled in $174 million (January 2), followed by $168 million (January 5) and $114 million (January 6), before experiencing a $98 million outflow on January 7. This synchronized reversal across multiple major asset classes suggests that market participants were responding to the same macro catalysts rather than asset-specific concerns.

Smaller-cap alternatives demonstrated relative resilience during this period. Solana ETFs maintained consistent inflows despite the broader market weakness, while Chainlink products shifted from several days of modest $800K-$2.2M accumulation to neutral positioning, indicating that investor capital was reallocating rather than completely exiting crypto products.

What This Means for the Crypto ETF Market

The January 7 reversal marks the first true test of crypto ETF demand sustainability in 2026. While the 6-7 week inflow streak demonstrated genuine institutional appetite following XRP’s listing, the emergence of outflows signals that this enthusiasm follows typical accumulation-distribution patterns. The fact that XRP ETFs remain above $1.5 billion in total assets despite outflows suggests the pullback represents normal market consolidation rather than a collapse in conviction.

Going forward, the crypto ETF market may experience increased volatility as investors navigate between conviction-driven accumulation and tactical profit-taking. The resilience of smaller alternative ETFs indicates that capital flight, if it occurs, would likely be selective rather than a complete sector-wide exodus.