What is happening now
In January 2026, the Bitcoin network is showing strong growth in on-chain activity and node participation. Despite a notable outflow of approximately $1.72 billion from US Bitcoin ETFs over the last five days, Bitcoin’s core network metrics such as transaction volume and active wallets have increased. Bitcoin nodes implementing recent protocol updates have also seen a rise, suggesting greater engagement from developers and users.
Why it matters
This growth is significant because it points to Bitcoin’s resilience amid market fluctuations and regulatory scrutiny. The outflow from ETFs, often viewed as institutional investment vehicles, indicates that some investors are pulling back from these products possibly due to uncertainty or profit taking. However, the rise in direct network usage suggests that retail users and some institutional players may be focusing more on holding and transacting Bitcoin directly, which can strengthen the network’s decentralization and long-term health.
Key risks
Risks remain, including regulatory changes affecting Bitcoin-related products, which could further impact ETF flows and trading volumes. The increased node activity has also been accompanied by reports of spam attacks, which strain network resources and could degrade user experience if not addressed. Additionally, tax policy challenges in several countries have created delays and complications for Bitcoin payments, potentially deterring new users from adopting the currency for everyday transactions.
What to watch next
Investors and users should monitor Bitcoin ETF flows closely in the coming weeks to assess if outflows continue or reverse. Watch for updates from major exchanges and wallet providers on handling tax issues affecting Bitcoin payments. Additionally, network developers will likely propose further protocol improvements to mitigate spam attacks and enhance node stability, which will be important to follow. Lastly, keeping an eye on Bitcoin’s price and transaction fee trends can help gauge overall network demand.
Quick FAQ
Q1: Why are Bitcoin ETFs facing outflows despite network growth?
ETF outflows can result from profit taking or shifts in investor preference for direct Bitcoin ownership rather than investment products. Network growth reflects actual use and interest in Bitcoin, independent of ETFs.
Q2: What is causing the spam attacks on Bitcoin nodes?
Spam attacks involve sending many small transactions to overload the network. This could be from malicious actors trying to disrupt services or test network limits.
Q3: How do tax policies affect Bitcoin payments?
Complex or unclear tax rules can delay Bitcoin payments because users and businesses may hesitate to transact until they understand reporting and compliance obligations.