CoinShares attributes the drawdown to a blend of seasonal positioning and structural caution. Year-end de-risking and holiday portfolio management pushed both institutional and retail accounts to trim exposure, while reduced liquidity meant even moderate selling could move prices and accelerate redemptions. Profit-taking after earlier 2025 gains added to the pressure, and the risk backdrop stayed heavy. Regulatory uncertainty—highlighted by delays around the U.S. Clarity Act—combined with macro headwinds such as tighter liquidity and shifting capital flows to reinforce a cautious stance.
Where the flows landed: a BTC/ETH drain with selective altcoin rotation
The flow split shows this was not a uniform exit from digital-asset ETPs. Bitcoin ETPs accounted for $443 million of net redemptions, Ethereum ETPs saw $59.5 million leave, while XRP and Solana ETPs recorded inflows of $70.2 million and $7.5 million, respectively, producing the $446 million net outflow. An ETP provides exchange-traded exposure to an underlying asset without direct token ownership, which makes these flows a practical read-through on how allocators are shifting risk.
The composition of the flows points to targeted risk reduction, not a full retreat. Heavy redemptions in Bitcoin and Ethereum reflect tactical de-risking by larger funds and holders, while inflows into XRP and Solana indicate selective redeployment into specific narratives or perceived value opportunities.
Operational implications for execution and treasury risk
Holiday-thin markets change the cost of doing business. Lower liquidity raises execution risk for large orders, so treasury managers should expect higher slippage when rebalancing during seasonal low-volume sessions. For active trading, the cross-current matters. Selective inflows into altcoin ETPs suggest demand pockets can coexist with broad risk reduction, making relative-value positioning more viable than one-direction exposure when liquidity is constrained.
The $446 million Christmas-week outflow highlights fragile year-end sentiment and a rotation within ETPs rather than a blanket exit from the asset class.