Crypto exchange-traded products (ETPs) experienced significant outflows over the Christmas period, with approximately $446 million leaving the market as year-end sentiment remained fragile. This downturn marks a notable shift from the inflows seen earlier in December, reflecting investor caution as 2025 draws to a close.
The outflows were primarily concentrated in Bitcoin and Ethereum ETPs. Spot Bitcoin ETFs saw net outflows of roughly $175 million on December 24 alone. BlackRock's IBIT experienced the most significant single-fund outflow, with $157.3 million departing the fund. Other major Bitcoin ETFs, including Fidelity's FBTC, Grayscale's GBTC, and Bitwise's BITB, also contributed to the overall decline. Ethereum ETPs mirrored this trend, with net outflows of $95.5 million on the same day. Grayscale's ETHE bore the brunt, with $50.9 million in redemptions, the highest single-day outflow for any Ether-focused fund.
Several factors contributed to this pre-holiday exodus. Trading volumes are typically lower during holiday sessions, and with thinner order books, even modest sell orders can translate into sizeable net outflows and wider spreads. Many institutional desks and investors reduce risk exposure before market shutdowns to avoid carrying positions through potentially volatile, low-liquidity periods. Some experts attribute the outflows to routine year-end activities rather than a fundamental erosion of long-term confidence. Vincent Liu, CIO at Kronos Research, stated that the retreats stem from mechanical factors tied to the calendar. Rick Maeda, a research associate at Presto Research, cautioned against reading too much into the data, citing historical comparisons to Christmas 2024, when Bitcoin ETFs suffered substantial outflows.
However, a broader perspective reveals that the crypto ETP market has absorbed substantial inflows throughout 2025. Despite the recent wobble, U.S.-traded spot Bitcoin ETFs hold approximately $113.8 billion in assets with cumulative net inflows of nearly $56.9 billion since January 2024. BlackRock's IBIT alone has taken in over $62 billion since its launch. Globally, crypto ETPs took in a record $5.95 billion in a single week in early October, with Bitcoin products accounting for $3.55 billion. October's net crypto ETP inflows reached $7.6 billion.
While Bitcoin and Ethereum ETPs experienced outflows, XRP bucked the trend, attracting $62.9 million in inflows. This surge underscores XRP's rising appeal, potentially driven by optimism around Ripple's regulatory outlook and adoption for cross-border payments. XRP's resilience amid declining confidence in major assets suggests investors are seeking alternative cryptocurrencies with distinct utility and growth potential.
Overall, the Christmas week outflows highlight the cryptocurrency market's sensitivity to seasonal influences and the impact of year-end financial strategies. While the immediate data points to caution, experts suggest viewing this as a temporary pause rather than a pivotal turn. Continued monitoring of post-holiday flows, liquidity, and macroeconomic drivers will be essential to determining whether this trend signals a sustained shift in institutional appetite or a temporary repositioning.
