As the festive season of Christmas and New Year approaches, the cryptocurrency market appears to have settled into a “hibernation mode.” US spot Bitcoin and Ethereum Exchange Traded Funds (ETFs) experienced significant collective outflows on Tuesday, largely attributed to routine year-end asset reallocations and a predictable tightening of liquidity ahead of the long holiday break. This period saw a clear resurgence of profit-taking pressure among investors.
Data from SoSoValue reveals that US Bitcoin spot ETFs registered a net outflow of $188.6 million on Tuesday, marking the fourth consecutive trading day of withdrawals. BlackRock’s IBIT bore the brunt of these outflows, recording a substantial single-day net outflow of $157.3 million. Fidelity’s FBTC and Grayscale’s GBTC were also impacted by the prevailing selling sentiment.
Similarly, Ethereum spot ETFs faced a net capital exodus, with $95.5 million flowing out on Tuesday. This stands in stark contrast to the previous day, which saw a net inflow of $84.6 million. Grayscale’s ETHE was the most affected among Ethereum ETFs, experiencing a single-day outflow of $50.9 million.
Industry experts are quick to contextualize these movements. Vincent Liu, CIO of Kronos Research, emphasized that the outflows from Bitcoin and Ethereum ETFs primarily reflect the typical functioning of year-end market mechanisms rather than a fundamental erosion of investor confidence. He identified insufficient liquidity, strategic portfolio rebalancing, and profit-taking as the principal drivers behind the market’s recent softness.
Echoing this sentiment, Nick Ruck, Head of LVRG Research, further elaborated that beyond seasonal profit-taking and reduced liquidity, tax-loss harvesting—where investors sell losing positions to offset taxable gains—also contributed to the recent capital withdrawals.
However, Rick Maeda, a researcher at Presto Research, urged caution against over-interpreting the pre-Christmas ETF fund dynamics. He highlighted that Bitcoin and Ethereum ETF flows have exhibited frequent volatility in recent months, making year-end de-risking and portfolio adjustments a normal occurrence, particularly following an intensified volatile fourth quarter.
To provide perspective, Maeda referenced data from a previous year, where Bitcoin spot ETFs recorded over $1.5 billion in net outflows during the four trading days before Christmas, at a time when Bitcoin’s price was retreating from all-time highs. In comparison, he suggests that the current wave of capital retraction is relatively mild.
Despite the broader crypto market’s downturn, CoinGecko data indicated Bitcoin trading at $86,755 at the time of writing, reflecting a 0.7% decrease over the past 24 hours. Ethereum, meanwhile, saw a 2.3% dip, settling at $2,918.
Intriguingly, not all cryptocurrency ETFs succumbed to selling pressure. XRP spot ETFs managed to attract $8.2 million in inflows on Tuesday, while Solana (SOL) spot ETFs also registered a healthy net inflow of $4.2 million.
In a contrasting market performance, US stock markets closed broadly higher on Tuesday. The S&P 500 index advanced 0.46% to close at 6,909.79 points, setting a new all-time high. The Nasdaq index climbed 0.57%, and the Dow Jones Industrial Average also posted a modest gain of 0.16%.
With US stocks closing early on December 24th and remaining shut on the 25th for Christmas, market observers are turning their attention to the post-holiday period. The general consensus is that market reactions and key economic indicators after the extended break will be crucial, offering significant clues for discerning market trends in early 2026.
“The real signals will emerge once the holidays conclude,” Vincent Liu affirmed. “Investors should closely monitor the return of liquidity, assess whether price action once again dictates fund flows, and pay particular attention to the US initial jobless claims report scheduled for December 27.”
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