There is an interesting phenomenon recently. In December last year, the net outflow from the US spot Bitcoin ETP was nearly $1 billion. On the surface, this seems quite alarming, but a closer look at the reasons reveals that it was mainly due to year-end tax-loss harvesting, which is essentially investors clearing their books at the end of the year. This does not indicate a problem with market demand. How can we verify this? The first trading day of the new year immediately showed a reversal with nearly $500 million in net inflows, which strongly suggests the true situation.

Looking at on-chain data, large holders (OG whales) did not show obvious signs of selling pressure. This from another perspective confirms that the sell-off was more of a passive tax operation rather than a mass exodus by major players.

More importantly, the fundamentals are quietly changing. Substantial progress has begun in institutional-grade asset tokenization. DTCC received a no-action letter from the SEC, officially launching tokenization services—what does this mean? It indicates that Wall Street-level clearing and settlement systems are starting to embrace on-chain assets. Meanwhile, JP Morgan Asset Management has launched a tokenized money market fund on Ethereum, marking an important step for traditional financial institutions on public blockchains.

Regulatory agencies are also accelerating their pace. The US Senate plans to review the Crypto Market Structure Bill on January 15. At this rate, it is hopeful that the legislation could be passed by 2026. From the year-end technical sell-off, to institutional asset onboarding, and the improvement of regulatory frameworks, the entire narrative chain is taking shape.