The Two-Month Reckoning: How Bitcoin ETF Redemptions Reached Historic Levels While Core Holdings Shift

Week of January 2, 2025 — Crypto markets show mixed signals as major institutional flows reshape positions across digital assets.

Capital Flight From Bitcoin Spot ETFs Hits Breaking Point

The U.S. spot Bitcoin ETF market witnessed its most severe redemption period since launch, with US$4.57 billion withdrawn over the final two months of 2024. November’s selloff dominated the retreat with US$3.48 billion in outflows, followed by a further US$1.09 billion exodus in December. This dual-month contraction stands as the worst stretch the emerging asset class has experienced since these products debuted in early 2024.

The timing of these massive fund withdrawals aligned with Bitcoin’s approximately 20 percent price correction during the same window. Yet market observers remain divided on the significance—some attribute the redemptions to routine portfolio rebalancing ahead of year-end, while others suggest long-term investors used the dip to consolidate their reserve positions by accumulating on weakness. Ethereum ETFs faced similar pressures, losing over US$2 billion during this identical period.

Corporate Treasuries Advance Strategic Accumulation

Even as institutional flows wavered, major cryptocurrency holders pursued aggressive acquisition strategies. Tether, the stablecoin issuer, deployed significant capital on New Year’s Eve by purchasing 8,888 Bitcoin, expanding its disclosed position to approximately 96,000 BTC. This latest tranche—valued near US$780 million at execution—followed the company’s stated policy of allocating up to 15 percent of quarterly earnings into Bitcoin accumulation. The resulting reserve base now ranks Tether among the world’s largest corporate Bitcoin holders, with its wallet becoming the fifth-largest known Bitcoin address and the second-largest private corporate treasury globally.

Beyond digital assets, Tether’s reserve diversification includes substantial precious metals exposure. The firm acquired 26 tons of gold during the third quarter, bringing its total yellow metal position to 116 tons as part of a comprehensive multi-asset reserve strategy.

Regulatory Expansion Creates New Opportunities

Turkmenistan’s formal legalization of cryptocurrency mining and exchange operations, signed into law in late November by President Serdar Berdimuhamedov, marks a significant regulatory shift in Central Asia. The legislation establishes comprehensive frameworks for digital asset creation, trading, and custody while classifying cryptocurrencies as property rather than legal tender or securities.

The law permits mining operations for both individual participants and commercial entities, contingent upon Central Bank registration and technical compliance standards. Exchange operators and custodial service providers now operate under formal authorization, subject to mandatory KYC protocols and anti-money-laundering safeguards. Notably, the framework explicitly prohibits illicit activities including cryptojacking, signaling regulators’ intent to build legitimacy through clear enforcement boundaries.

Market Snapshot: Price Movements Across Major Assets

Bitcoin (BTC) trades at US$91,200, up 1.35 percent over the prior 24 hours.

Ethereum (ETH) stands at US$3,130, advancing 0.88 percent daily.

XRP (XRP) is priced at US$2.08, gaining 4.03 percent over 24 hours.

Solana (SOL) trades at US$134.76, up 2.39 percent within the same timeframe.