Bitcoin ETFs Record Massive Outflows: $825 Million in Five Trading Days

Continued Sell-Off in Bitcoin ETFs

US spot Bitcoin ETFs have continued their losing streak through the shortened trading session on Christmas Eve. According to data from British investment firm Farside Investors, net outflows on December 24 amounted to approximately $175.3 million ^[1][3]. This means the products closed the last US trading day before the holidays in negative territory.

In total, outflows over the past five trading days amount to approximately $825.7 million ^[1][3]. Since December 15, US Bitcoin ETFs have recorded net outflows on nearly all trading days, with the exception of a single day last week when inflows of around $457.3 million were reported ^[1][3].

Seasonal Effects and Tax Motivations

Market observers primarily attribute the development to seasonal effects. Trader Alek explained on platform X that a large portion of the selling is due to tax-loss harvesting, which typically occurs at year-end ^[1]. "Most of the selling is due to tax loss harvesting, which means it'll be over in a week," Alek stated ^[3].

He also pointed to the recent quarterly options expiration, which can influence the risk appetite of institutional investors ^[1]. "This is temporary and institutions will back to bidding soon," he added ^[3].

US as Largest Seller, Asia as Buyer

Meanwhile, the Coinbase Premium Index has shown a negative picture for weeks, indicating lower demand from the US ^[1]. The Coinbase Premium measures the price difference between Coinbase's BTC/USD and Binance's BTC/USDT pairs and has remained largely in negative territory throughout December ^[3].

Analyst Ted Pillows summarized the situation on X: "US is now the biggest seller of $BTC. Asia is now the biggest buyer of Bitcoin" ^[1][3]. A negative premium reflects a lack of buyer demand from the US, which is needed to support higher price levels ^[3].

Ethereum ETFs Also Under Pressure

Capital flows for Ethereum ETFs have also been predominantly negative since early November, as evidenced by 30-day moving averages ^[1]. The 30-day moving average net flows have been consistently negative since early November ^[3].

Bitcoin Shows Relative Stability

Nevertheless, Bitcoin is holding relatively steady at $87,700, which can certainly be interpreted as a positive sign ^[1]. Bitcoin is trading at $87,719, up 1.0 percent from the previous day ^[2].

Increased volatility is expected over the Christmas period, as liquidity tends to be thinner due to the holidays ^[2]. Individual orders can therefore trigger larger movements.

Outlook for 2025

On a macroeconomic level, robust US labor market data is providing tailwinds for traditional financial markets. Better-than-expected initial jobless claims strengthen expectations that the US economy will remain stable despite high interest rates ^[2].

Investors are already looking ahead to 2025 and potential Federal Reserve rate cuts, which could also benefit risk assets like cryptocurrencies in the medium term ^[2]. Trader BitBull argued that negative ETF net flows, even on a 30-day moving average basis, do not necessarily indicate "final market tops": "A trend change will likely start with ETF flows turning positive again before price makes a strong move" ^[3].