On Christmas Eve 2025, the cryptocurrency market lacked any festive atmosphere. According to Glassnode 's tracking, the 30-day simple moving average of US Bitcoin (BTC) and Ethereum (ETH) spot ETFs has been declining since turning negative in November, with institutional funds flowing out for eight consecutive weeks, plunging the market into its most severe liquidity vacuum.
Capital outflows hit a record high
In November, Bitcoin ETFs saw net outflows of $3.4 billion , the second highest on record; Ethereum ETFs also lost $1.4 billion during the same period. Entering late December, the pace of withdrawal showed no signs of slowing, with another $952 million flowing out in the latest week. BlackRock's flagship product, ETHA, saw a single-week outflow of $459 million, indicating that large institutions are adopting a "tap-off" defensive strategy.
Liquidity Tightening and a Vicious Price Cycle
As President Trump's first fiscal year draws to a close, the market had initially hoped for policy benefits. However, the combined effects of regulatory oversight and a high-interest-rate environment led investors to seek safe havens. In November, Bitcoin and Ethereum fell by 16% and 21% respectively. The price decline exacerbated ETF redemption pressure, which in turn further depressed prices, creating a classic vicious cycle of liquidity problems. Experts point out that current trading depth has significantly decreased, meaning even small sell orders can influence prices, and any portfolio adjustments by large investors could be amplified into dramatic price swings.
Giant Resilience and Sector Rotation
Despite the sluggish market, BlackRock's IBIT fund has still accumulated $62.5 billion in inflows this year, ranking first among all commodity ETFs and even surpassing the gold ETF GLD. This "BlackRock effect" suggests that some long-term funds are choosing to buy on dips. Bloomberg analyst Eric Balchunas commented:
"If they can still rake in $25 billion in a bad year, imagine how good it would be."
Furthermore, market funds have not completely fled digital assets. Statistics show that ETFs tracking XRP and Solana saw net inflows of approximately $43.89 million in the past week, indicating that funds are rotating within sectors, locking in relatively strong or thematically relevant tokens, rather than completely withdrawing their positions.
Indicators for the Era of Zero-sum Game
As 2025 draws to a close, ETF flows have become a barometer of the market. Institutional funds are no longer blindly chasing highs; the zero-sum game means that every portfolio adjustment is a battle against opposing positions. Analysts advise investors to focus on ETF net inflows, trading depth, and portfolio concentration rather than constantly monitoring price fluctuations. These data more directly reflect the true momentum of funds and are key to predicting the next trend.
While the current atmosphere is chilly, large outflows often accompany medium- to long-term market bottoms. Only when liquidity gradually improves and ETFs turn to net inflows can the market potentially see signs of recovery. Until then, every allocation requires more precise risk-reward calculations—this is the final exam for all participants in the winter of 2025.
