Bitcoin ETF Withdrawals Rise, Demand Falls in U.S.

U.S. Bitcoin ETFs experience significant outflows amid reduced demand during year-end, driven by tax-loss harvesting.

Bitcoin ETFs in the U.S. saw significant outflows with $825.7 million over five trading days until December 24. Christmas Eve alone experienced $175.3 million in redemptions.

U.S. Bitcoin ETFs Face $825.7 Million Outflows

Outflows are attributable to year-end tax-loss harvesting and options expiries. BlackRock (iShares Bitcoin Trust) led with a single-day redemption worth $91.37 million. U.S. investors emerged as significant sellers, impacting demand. Bitcoin and Ether ETFs face outflows before Christmas.

U.S. Bitcoin Selling Offsets Asian Buying Demand

Market data indicates the U.S. as a primary Bitcoin seller, with Asia maintaining buyer demand. The Coinbase Premium Index suggested weakened U.S. demand against Asia. Traders anticipate post-holiday liquidity improvement.

The ongoing outflows are expected to ease once seasonal pressures subside. Bitcoin and Ether ETFs both recorded substantial negative flows, echoing previous year-end trends. The outflows contribute to temporary market volatility.

Year-End Trends Echo Past ETF Market Downturns

Similar downturns were noted in ETF markets previously, often around year-end. Last year, tax strategies and expiries similarly influenced market flows.

Expert opinions highlight the seasonal nature of these outflows. Traders suggest that, once prices stabilize, inflows might resume. Alek, a trader, noted, “Most of the selling is due to tax loss harvesting, which means it’ll be over in a week.”