Bitcoin exchange-traded funds in the United States ended the final trading session before Christmas under pressure, extending a week-long streak of institutional selling and cementing the US as the largest net seller of BTC in the market right now.
$175M outflows on Christmas Eve, $825M drained in five days
Fresh data from UK-based investment firm Farside Investors shows that US spot Bitcoin ETFs recorded net outflows of more than 175 million dollars on Christmas Eve alone. The shortened holiday session did nothing to slow redemptions, with total net outflows hitting approximately 175.3 million dollars for the day.
This capped off a difficult stretch for institutional Bitcoin products. Over the last five trading days, US spot Bitcoin ETFs saw a cumulative 825.7 million dollars withdrawn, with every single one of those sessions closing in negative territory.
Looking slightly further back, the pattern has been clear since mid-December. From December 15 onward, every trading day has ended with net outflows except for December 17, when the market briefly reversed course and attracted about 457.3 million dollars in new ETF inflows. That one positive session, however, has not been enough to offset the broader wave of selling.
Why institutions are selling: taxes and options
Market traders widely attribute the late-December weakness to seasonal and technical factors rather than a structural collapse in demand.
One trader, Alek, pointed to “tax loss harvesting” as a key driver behind the recent redemptions. Investors looking to lock in losses before the end of the tax year often sell underperforming positions in late December, which can temporarily pressure prices and ETF flows. According to this view, the selling should fade quickly once the calendar turns.
Alek also highlighted the impact of a record options expiry on the preceding Friday. Large derivatives expiries can dampen risk appetite, as traders unwind positions or hedge aggressively around key strike levels. That combination of tax-driven selling and options-related positioning created a set-up in which Bitcoin ETFs struggled to attract buyers into year-end.
In his assessment, this environment is temporary, with institutional demand expected to re-emerge once seasonal pressures subside and markets recalibrate after the holiday period.
Coinbase Premium turns negative as US becomes “biggest seller”
Beyond the fund flows themselves, other metrics reveal a clear shift in regional demand. A widely watched indicator, the Coinbase Premium, has spent much of December below zero. This metric tracks the price difference between the BTC/USD pair on Coinbase — a venue used heavily by US-based institutions — and the BTC/USDT pair on Binance, which has a broader global and retail footprint.
A sustained negative premium suggests that Bitcoin is trading cheaper on Coinbase than on Binance, indicating weaker buying interest from US-based participants relative to traders elsewhere. One analyst, Ted Pillows, summarized the situation bluntly: the United States has effectively become the largest seller of Bitcoin, while Asian markets have stepped in as the strongest net buyers.
Another market observer noted that the Coinbase Premium turned firmly negative nine days earlier around a key technical level near 90K on the referenced indicator, with Bitcoin repeatedly failing to break through that zone. The thesis is simple: once that level is convincingly reclaimed and the premium flips back into positive territory, the odds of a durable upside rally improve dramatically. Until then, US demand appears to be lagging, and sellers continue to dominate American trading hours.
ETF flows weak since early November
The recent Christmas-week outflows fit into a longer-running pattern. On a 30-day moving average basis, net flows into both Bitcoin and Ether ETFs have been consistently negative since the start of November.
Trader BitBull cautioned that negative ETF flows, even when smoothed over a month, should not be automatically read as a signal of a final market top. Historically, tops are not defined solely by outflows from institutional vehicles. Instead, he argued, markets tend to move through a three-step process:
1. Price stabilizes after a strong rally or correction.
2. Capital flows flatten out and turn broadly neutral.
3. Only then do sustained inflows return as confidence normalizes.
From this perspective, current data suggests that liquidity is dormant rather than destroyed. Investors are not necessarily abandoning Bitcoin altogether; many are simply stepping to the sidelines, waiting for clearer signals before committing new capital.
Is this selling structurally bearish?
While the recent numbers look alarming on the surface — hundreds of millions exiting ETFs in just a few days — analysts stress the importance of context.
First, late December is traditionally one of the most distorted periods of the year in financial markets. Reduced liquidity, end-of-year portfolio rebalancing, tax-driven trades, and holiday closures often produce price moves and flow patterns that do not reflect long-term sentiment.
Second, despite the latest redemptions, spot Bitcoin ETFs in the US continue to hold substantial assets and have already demonstrated their capacity to absorb sizable demand during bullish phases. The December 17 inflow of more than 457 million dollars is a reminder that institutional capital can return rapidly when risk appetite improves.
Finally, the shift in regional dominance — with the US selling and Asia buying — does not automatically translate into a bearish global picture. Instead, it highlights how Bitcoin adoption and trading leadership can rotate across geographies, depending on regulation, macro conditions, and investor behavior.
What ETF outflows actually mean for Bitcoin price
ETF outflows often trigger fears that significant volumes of physical Bitcoin are being dumped on the market. In practice, the relationship is more nuanced.
When investors redeem ETF shares, the fund provider may either deliver the underlying Bitcoin to an authorized participant or sell BTC in the open market to meet cash redemptions. The actual price impact depends on how redemptions are structured, overall market liquidity, and whether other buyers are stepping in at the same time.
In a deep, liquid market with active spot and derivatives trading across regions, a few hundred million dollars in ETF outflows over several days is meaningful but not necessarily decisive. Moreover, simultaneous buying from non-US investors — as suggested by Asian spot demand and derivatives positioning — can cushion the impact of US-based selling.
The role of macro and regulation
The current ETF outflows cannot be isolated from the wider macroeconomic and regulatory backdrop.
Higher interest rates, uncertainty around future central bank policy, and shifting expectations for inflation can all influence risk assets, including Bitcoin. When investors can earn relatively attractive yields on cash or government bonds, some are less inclined to hold volatile assets, especially toward year-end when performance is locked in for reporting.
On the regulatory side, the approval of spot Bitcoin ETFs in major jurisdictions has been a double-edged sword. It has brought institutional legitimacy and easier access, but it has also made Bitcoin more sensitive to traditional portfolio management dynamics. Large institutions now treat BTC more like any other asset on their books — to be trimmed, harvested for tax purposes, or rotated out of during periods of stress.
What could trigger the return of the “institutional bid”?
If professional investors are temporarily in retreat, what might bring them back?
– Clarity on monetary policy: A more predictable path for interest rates, especially if central banks lean toward easing, tends to favor risk assets and can reignite institutional interest in Bitcoin.
– Price stabilization and lower volatility: Many institutional mandates limit exposure to highly volatile assets. A period of sideways consolidation can be just as important as a rally in restoring comfort levels.
– Improved US demand indicators: A sustained uptick in the Coinbase Premium, shrinking ETF outflows, and stronger volumes during US trading hours would all signal that American buyers are stepping back in.
– Macro or industry catalysts: Events such as a Bitcoin halving, the introduction of new regulated products, or the entry of large traditional asset managers can quickly swing sentiment.
In that framework, some traders maintain a constructive view for 2026, arguing that the current lull in ETF flows is part of a larger accumulation and consolidation phase rather than an end-of-cycle blow-off top.
Short-term pain, long-term narratives
The contrast between short-term selling and long-term narratives is stark. On the one hand, the numbers are clear: US-based spot Bitcoin ETFs have just logged several consecutive sessions of sizable outflows, the United States currently behaves like a net seller, and institutional desks are mostly defensive into year-end.
On the other hand, the broader Bitcoin story — as a scarce digital asset, a macro hedge for some investors, and a programmable monetary network — has not fundamentally changed. Periods of ETF weakness and negative regional premiums have appeared in previous cycles without derailing the longer-term adoption curve.
For traders and investors, the key is distinguishing between cyclical flows and structural demand. Seasonality, taxes, and options expiries belong to the former category; network effects, regulatory maturation, and institutional onboarding belong to the latter.
How investors can interpret this environment
For readers trying to make sense of the current landscape, several practical takeaways emerge:
– Do not read a single week in isolation: A five-day run of 825.7 million dollars in ETF outflows is significant, but needs to be compared against months of prior inflows and the total assets held by these products.
– Watch the indicators that matter: Coinbase Premium, ETF netflows, funding rates, and regional trading volumes together give a more complete picture than price alone.
– Understand the calendar: Year-end flows are often noisy. Moves driven by tax and accounting considerations can reverse quickly once the new year begins.
– Separate sentiment from structure: Weak sentiment now does not necessarily imply a broken structural case for Bitcoin; conversely, strong flows at times can mask underlying fragilities.
Outlook after the holidays
As markets exit the holiday period and normal liquidity returns, attention will likely shift from tax-driven selling to broader macro drivers and upcoming catalysts. If US selling pressure abates and Asian demand remains robust, Bitcoin could see a rebalancing of flows that either stabilizes price or sets the stage for the next leg of volatility — up or down.
For now, the message from the data is straightforward: US spot Bitcoin ETFs have undergone a pronounced, but seasonally understandable, bout of outflows. The United States is temporarily acting as the largest net seller of BTC, while buyers in other regions step in to absorb supply. Whether this phase proves to be a brief year-end anomaly or the opening chapter of a longer consolidation will depend on how quickly institutional capital decides to return once the holiday dust settles.
This text does not constitute investment advice. All investment and trading activity involves risk, and each reader should conduct independent research and evaluate their own financial situation before making decisions.