Bitcoin ETFs Experience Major Holiday Outflows: Decoding Institutional Behavior in Late 2025

The recent Christmas holiday week, spanning December 22nd to December 26th, saw the Bitcoin market deviate sharply from the anticipated “Santa Rally.” Instead, it faced a significant cool-down from Wall Street institutions. Latest on-chain data and ETF fund monitoring reports reveal that US spot Bitcoin ETFs recorded substantial net outflows totaling an estimated $782 million (approximately NT$ 25.5 billion) during the trading days around the Christmas period.

Holiday Position Adjustments Drive Outflows Amidst Softening Non-Institutional Demand?

According to monitoring data from SoSoValue, the eleven US spot Bitcoin ETFs experienced considerable net outflows from Monday, December 22nd, through Wednesday, December 24th (when US stock markets closed early), and Friday, December 26th. The cumulative figure approached $782 million.

During this period, the largest single-day withdrawal occurred on Friday, coinciding with a notable drop in spot Bitcoin prices, resulting in a net outflow of $276 million from ETFs. BlackRock’s IBIT fund bore the brunt of these redemptions, losing nearly $193 million, followed by Fidelity’s FBTC fund with $74 million in outflows. Grayscale’s GBTC fund also continued to see modest redemptions.

By Friday, the total net assets of US-listed spot Bitcoin ETFs had decreased to approximately $113.5 billion, down from a peak exceeding $120 billion earlier in December 2025, despite Bitcoin’s price remaining relatively stable around the $87,000 mark.

Notably, Friday marked the sixth consecutive trading day of net outflows for spot Bitcoin ETFs, establishing the longest continuous outflow streak since early autumn. Over these six days, cumulative outflows surpassed $1.1 billion. Analysts suggest that this wave of redemptions is primarily attributable to seasonal factors rather than a fundamental weakening of institutional demand.

Why Did Institutions Opt for “Sell-Offs” During the Christmas Period?

With Bitcoin prices maintaining a high oscillation between $87,000 and $90,000 at the close of 2025, the substantial capital exodus from ETFs warrants closer examination. Several key factors likely contributed to this trend:

1. Typical “De-risking” Operations

   The period between Christmas and New Year typically sees subdued trading activity and significantly reduced liquidity across major European and American financial markets. In such “thin markets,” even relatively small sell orders can trigger sharp price fluctuations. To mitigate the risk of uncontrollable “black swan” events during the holidays, fund managers often opt to liquidate portions of their highly volatile assets before breaks, thereby locking in annual profits. As a prominent risk asset, Bitcoin naturally became a target for such de-risking.

2. Year-End Asset Rebalancing

   The year 2025 witnessed robust performance in US equities, particularly in AI and technology stocks, with the S&P 500 index repeatedly reaching new highs. Many multi-asset funds operate with fixed asset allocation ratios (e.g., a 5% allocation to cryptocurrencies). As US stocks appreciated, institutions were compelled to “sell” a portion of their holdings (including Bitcoin ETFs) to purchase bonds or other assets to maintain their portfolio’s desired balance. This is a mechanical rebalancing act, not an indication of a bearish outlook on Bitcoin’s fundamentals.

3. Tax Considerations

   For investors who acquired Bitcoin at higher price points earlier in 2025 (e.g., at $120,000 in October), selling now allows them to realize “tax losses.” These losses can then be used to offset substantial capital gains taxes incurred from the strong performance of tech stocks this year. This tax-loss harvesting strategy provides a compelling explanation for the concentration of outflows during the final week of the year.

Short-Term Pressure, But Not Necessarily a Long-Term Bearish Signal?

A recent report from Glassnode indicates that Bitcoin and Ethereum ETFs have entered a phase of continuous capital outflow, suggesting institutional investors are withdrawing from the cryptocurrency market. Since early November 2025, the 30-day simple moving average of net flows into both US spot Bitcoin and Ethereum ETFs has consistently trended downwards. This persistent decline in ETF holdings points to muted market participation as overall market liquidity tightens.

Since early November, the 30D-SMA of net flows into both Bitcoin and Ethereum ETFs has turned negative and remained so.
This persistence suggests a phase of muted participation and partial disengagement from institutional allocators, reinforcing the broader liquidity contraction… pic.twitter.com/1aglRpQqD9

— glassnode (@glassnode) December 23, 2025

The Glassnode report elaborates, “This persistence suggests a phase of muted participation and partial disengagement from institutional allocators, reinforcing the broader liquidity contraction in the crypto market.” It notes that capital flows into crypto ETFs typically lag behind the spot market, which has been in a downtrend since mid-October. ETFs are also seen as a crucial barometer of institutional sentiment, which had been a market driver for much of the year. However, with the overall market contraction, institutional sentiment appears to have shifted bearish, potentially foreshadowing a broader retreat by large asset allocators from the crypto space.

However, Vincent Liu, CIO of Kronos Research, offered a contrasting perspective in an interview with foreign media. Liu stated that Bitcoin ETF outflows during the Christmas period are not uncommon, attributing them to “holiday positioning” and insufficient liquidity rather than a collapse in underlying demand. He anticipates market conditions will improve in early January 2026 as institutional capital flows typically re-engage and normalize. Liu further highlighted that the Federal Reserve’s potential pivot towards an accommodative policy in 2026 would provide additional support for ETF demand. “The interest rate market has already priced in 75 to 100 basis points of rate cuts, indicating strengthening easing momentum,” he added. “Furthermore, the continuous expansion of bank-led crypto infrastructure is lowering barriers for large asset allocators.”