2025-12-29 14:28:49

Around Christmas, interesting shifts in capital flows appeared in the US spot ETF market. Bitcoin ETFs saw a massive weekly outflow of $276 million, with total net outflows reaching $782 million. Ethereum was not spared either, with $16.57 million drifting away. It looks a bit scary, right?

But don’t panic just yet. There’s a key detail—the timing of this sell-off. Why are investors selling before the end of the year? Many are engaging in tax-loss harvesting. In simple terms, they are cutting off assets at a loss to offset their taxable income for the year. Considering Bitcoin has already fallen 30% from its October high, this move is actually quite reasonable.

This isn’t a fundamental problem; it’s purely a technical market action. Historical data shows that similar year-end exoduses often rebound quickly after the New Year—capital tends to flow back in as part of routine operations.

Even more interestingly, during the same period, XRP spot ETFs attracted capital, and Solana ETFs also rose against the trend. This indicates that investors are actually rotating assets rather than collectively bearish on the crypto market. Such divergence often reflects the market’s vitality.

ETH-0.41%

BTC-0.64%

XRP-0.69%

SOL-0.54%

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CodeSmellHunter

· 7h ago

Tax loss harvesting has been talked about so many times. Every year, it's the same story. So, what then? I've never seen a rebound happen so quickly.

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AirdropHunter9000

· 7h ago

Tax loss harvesting is a routine operation every year. To put it simply, it's just legal tax avoidance. Next spring, BTC will definitely be a full-blown rally again. Those calling for a short now are all the ones who didn't hold on.

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LootboxPhobia

· 7h ago

It's the old trick of tax month again, playing this game every year --- Wait, XRP is rising? I didn't notice, I need to see if it's happening again --- Sounds nice, but it's actually just a schedule for harvesting retail investors --- A rebound? I'm just worried that it will crash before the rebound comes --- Asset rotation sounds sophisticated, but in reality, it's just moving money from one pocket to another --- This time is different, I have a feeling --- I'm relieved when Solana rises, it means it's not completely dead yet

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CryptoSurvivor

· 8h ago

It's that time of the year again for tax-loss harvesting, the same show every year. Wake up everyone, you should know what happens at the end of the year. Selling ≠ being bearish, how many times do I have to say this for it to sink in? Funds are rotating, it's not that simple. This is the true market temperature. BTC drops 30% and people panic? I've seen crazier things. The story of XRP attracting funds is quite interesting. Some follow the trend, some see the clues. The New Year rebound is a routine script; hold steady and you're good. This wave of divergence is actually an opportunity. Whoever understands it will laugh last.

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BackrowObserver

· 8h ago

It's the same old story again. I've heard the excuse of tax loss harvesting a hundred times. Every time they say there's a rebound, a rebound. But what’s the result? I can't quite understand why BTC is dumping so much, yet ETH can still stay steady... Could it be that institutions are secretly reallocating their positions? Wait, XRP is actually still attracting funds? Alright, now I get it. It's indeed a rotation, not a dump. Looking back at the beginning of the year, it's obvious whether the rebound talk was reliable or not. To put it nicely, it's asset rotation; to put it bluntly... investors are playing a game of hot potato.

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