Spot bitcoin, ether ETFs see outflows amid Christmas holiday derisking

U.S. spot bitcoin and Ethereum exchange-traded funds saw net outflows on Tuesday ahead of the Christmas holiday, as year-end positioning and thin liquidity weighed on flows.

Spot bitcoin ETFs reported $188.6 million in net outflows on Tuesday, extending their streak of negative flows to four consecutive days, according to SoSoValue data. BlackRock's IBIT posted the largest outflows among the funds, with $157.3 million exiting the product. Fidelity's FBTC, Grayscale's GBTC, and Bitwise's BITB also reported outflows.

On a weekly sum, spot bitcoin ETFs logged $497.1 million in net outflows last week, reversing inflows of $286.6 million in the week ended Dec. 12.

Meanwhile, spot Ethereum ETFs reported $95.5 million in net outflows on Tuesday, compared to inflows of $84.6 million a day earlier. Grayscale's ETHE led the outflows, with $50.9 million leaving the fund — the largest daily outflow among ether ETFs.

Vincent Liu, CIO of Kronos Research, said the outflows from BTC and ETH ETFs reflect year-end mechanics rather than a shift in investor conviction, with thin liquidity, portfolio rebalancing, and profit-taking driving the moves.

Nick Ruck, director of LVRG Research, shared similar views, saying that seasonal profit-taking, tax-loss harvesting, and thinning holiday liquidity are likely contributing to the recent outflows as "investors de-risk ahead of Christmas." 

However, Rick Maeda, research associate of Presto Research, said he wouldn't over-interpret the BTC and ETH ETF outflows going into Christmas.

"Flows have been choppy for the past couple of months, and some degree of year-end de-risking and balance sheet housekeeping is normal, particularly after a volatile fourth quarter," Maeda said.

Maeda also pointed to a seasonal parallel. In the four trading days leading up to Christmas 2024, spot bitcoin ETFs recorded more than $1.5 billion in net outflows as bitcoin retreated from a fresh all-time high. "Compared with that episode, the current drawdown in flows looks relatively modest," Maeda added.

Bitcoin traded down 0.7% over the past 24 hours at $86,931 as of 2:30 a.m. ET Wednesday, according to The Block's price page. Ether slid 1.18% to $2,931.

Meanwhile, spot XRP ETFs saw $8.2 million in inflows, and spot SOL ETF logged inflows of $4.2 million.

Stock rally

Contrary to the ETF outflows and the price declines seen across cryptocurrencies, U.S. equities saw a broader rally. The S&P 500 gained 0.46% on Tuesday, closing at a record high of 6,909.79. The Nasdaq Composite added 0.57%, and the Dow Jones Industrial Average rose 0.16%.

Adding to the macro backdrop, the Commerce Department reported Tuesday that the U.S. economy grew at an annualized rate of 4.3% in the third quarter, compared with the 3.8% annual pace in the second quarter.

The U.S. stock markets will close early at 1 p.m. ET on Dec. 24, and will remain closed on Dec. 25 for the Christmas holiday. The markets will reopen on Dec. 26.

Market experts said traders should watch for economic indicators following the Christmas break, for it can provide a peek into how markets will perform in early 2026.

"The real signal comes post-holiday," Vincent Liu, CIO of Kronos Research, told The Block. "Watch liquidity return, price-led flows, and U.S. initial jobless claims on Dec. 27."