“Tax Loss Harvesting” Drives $825M Outflow From Bitcoin ETFs This Week: Analyst

Binance Founder Changpeng Zhao has reminded crypto traders of something nobody likes to admit: the "perfect Bitcoin buy" usually feels bad at the time because it occurs when the market is characterized by fear, uncertainty and doubt, rather than when everyone is celebrating new highs.

Zhao's holiday post comes at a time when Bitcoin is back in a turbulent zone on the chart. On Dec. 25, the pair, as per Trading View, traded within a wide daily range, reaching a high of almost $90,599 and a low of around $86,412 before closing at around $87,784, marking a decline of around 1% for the day. 

BINANCE:BTCUSD by TradingView">

This kind of price action shakes confidence, punishes late longs and tempts short sellers to press their luck. And that is exactly why CZ’s comment matters. 

The market rarely provides easy entry points with green candles and positive sentiment. More often, it forces buyers to step in when sentiment is negative, timelines are uncertain and price is fluctuating below a significant point, like $90,000 per BTC.

So, what's next for Bitcoin?

If Bitcoin can hold the mid-to-high $80,000s and reclaim $90,000 with a couple of convincing closes, the next psychological zones around $95,000 and $100,000 will come into view for potential buyers, as these were previously areas where sellers emerged. 

However, if the $86,400 area breaks, the downside opens up for a deeper pullback into the low $80,000s — that is when the panic headlines usually start. In this environment, CZ's advice is simple: the obvious buys of Bitcoin are almost never obvious on the day you have to make a decision.

Bitcoin whale deposits to Binance fell sharply in December, a shift CryptoQuant framed as a constructive near-term signal because it implies less immediate sell-side supply moving onto the market’s biggest exchange venue.

Bitcoin Selling Pressure Is Fading For Now

CryptoQuant analyst Darkfost wrote on Dec. 24 that “the latest data shows a clear decline in Bitcoin inflows to Binance coming from whales over the month of December.” He said monthly whale inflows dropped from roughly $7.88 billion to $3.86 billion, “effectively being halved within just a few weeks,” calling it “a significant slowdown in BTC deposits to Binance by the largest holders.”

The bullish read is mostly mechanical. Exchange inflows are not the same thing as selling, but they are a prerequisite for selling at scale, and Binance remains the dominant exchange in exchange-related flows in CryptoQuant’s framing.

Darkfost put it plainly: “In the current environment, the observed trend remains constructive. Binance continues to capture the largest share of exchange-related flows. When inflows from influential participants such as whales decline on this platform, it generally suggests a reduction in their selling pressure.”

He also cautioned that a downtrend in aggregate deposits does not eliminate the risk of sudden, market-moving transfers. “That said, this broader trend does not rule out the occurrence of occasional significant movements,” Darkfost wrote. “Some inflows can still impact the market, even if they remain relatively isolated.”

As an example, he pointed to a recent $466 million spike across the 100 BTC to 10,000 BTC cohorts, alongside more than $435 million in inflows coming specifically from the 1,000 to 10,000 BTC range.

Related Reading: The Macro Conditions For Bitcoin In 2026: Analyst Breaks Them Down

Those bursts matter because they can reintroduce volatility even if the baseline is calmer. “These sudden movements are a reminder that whales retain the ability to influence volatility at any time, even within a broader slowdown,” Darkfost said, adding that when large holders “move thousands of BTC in single transactions,” they can trigger sharp moves “whether through sudden volatility spikes or deeper corrections, depending on the volumes deposited and potentially sold.”

BTC Whale Capitulation On Pause

A separate CryptoQuant update on Dec. 23 echoed the idea that the most acute stress may have eased. “Whale Capitulation on Pause,” the firm wrote, saying realized losses from “new whales” “significantly impacted the price drop from $124K to $84K.” Since the recent low, CryptoQuant said, those realized losses “have declined and are now flat.”

Put together, the message is that one key source of near-term supply pressure,large deposits onto Binance,has cooled, while the realized-loss impulse tied to “new whales” is no longer intensifying. The caveat is the same one Darkfost emphasized: the market can look quiet in aggregate and still get rattled by a handful of large deposits if whales decide to move size again.

At press time, BTC traded at $87,792.

Moscow Exchange and St. Petersburg Exchange have confirmed readiness to launch regulated crypto trading once Russia’s legislative framework takes effect by mid-2026.

According to , the exchanges’ announcements came following the Bank of Russia’s December 23 release of a regulatory concept that sets July 1, 2026, as the deadline for developing comprehensive cryptocurrency legislation.

Moscow Exchange stated it is “actively working on solutions to service the cryptocurrency market,” while St. Petersburg Exchange emphasized it already possesses “the necessary technological infrastructure for trading and settlements.“From Resistance to Regulated Markets

Russia’s path toward crypto regulation began gaining momentum in mid-2024, when the Ministry of Finance first proposed allowing qualified investors to trade digital currencies on licensed exchanges.

Anatoly Aksakov, head of the State Duma Financial Market Committee, said at the time that major exchanges were “already actively involved in developing the cryptocurrency market and organizing the necessary infrastructure.“

The regulatory framework divides market access between qualified and non-qualified investors under sharply different conditions.

Non-qualified investors will be limited to purchasing liquid cryptocurrencies from a defined list after passing mandatory knowledge tests, with annual purchases capped at 300,000 rubles (approximately $3,800) through a single intermediary.

Qualified investors face no volume restrictions but must demonstrate understanding of crypto risks through testing, though they will be barred from purchasing anonymous tokens that conceal transaction data.

Despite the forthcoming trading infrastructure, Russian authorities maintain their ban on using cryptocurrencies for domestic payments.

🇷🇺 Russian lawmaker Anatoly Aksakov said that payments in Russia must only be conducted in rubles, dismissing crypto becoming legal tender. — Cryptonews.com (@cryptonews)

State Duma Committee Chairman Anatoly Aksakov reinforced this position on December 17, declaring that cryptocurrencies “will never become money within our country” and can only function as investment instruments, with all domestic payments required in rubles.

The Bank of Russia originally called for a total ban on crypto exchanges and token trading, but Western sanctions prompted a policy shift.Mining Boom Drives Economic Integration

Russia’s crypto ecosystem has expanded dramatically beyond trading speculation.

The country recorded $376.3 billion in received crypto transactions between July 2024 and June 2025, surpassing the United Kingdom’s $273.2 billion and making Russia Europe’s largest crypto market by transaction volume, according to Chainalysis data.Source: Chainalysis

Large-scale transfers exceeding $10 million grew 86% in Russia during this period, nearly double the 44% growth seen across the rest of Europe, while DeFi activity surged eightfold in early 2025 before stabilizing at three and a half times the mid-2023 baseline.

Much of this growth has been tied to A7A5, a ruble-pegged stablecoin that reached $500 million in market capitalization despite Western sanctions, becoming the world’s largest non-dollar stablecoin.

The mining sector has also become particularly significant for Russia’s economy.

Senior Kremlin official Maxim Oreshkin recently argued that crypto mining should be classified as export activity since mined assets effectively flow abroad even without crossing physical borders.

Industry estimates suggest Russia produces tens of thousands of Bitcoins annually, generating approximately 1 billion rubles in daily mining revenue, and that the country accounted for over 16% of global hashrate during the summer months.

In fact, Central Bank Governor Elvira Nabiullina also recently acknowledged that crypto mining contributes to the ruble’s strength.

🇷🇺 Russia's Central Bank confirms crypto mining strengthens the ruble as Kremlin officials push for formal export classification amid persistent underground operations. — Cryptonews.com (@cryptonews)

However, she noted that quantifying its exact impact remains difficult, as much of the industry operates in gray areas, with illegal mining costing Russia billions of dollars annually through stolen electricity and unpaid taxes.

Russia legalized crypto mining on November 1, 2024, requiring legal entities to register with the Federal Tax Service.Banks Enter Digital Assets Market

Russia’s largest lender, Sberbank, has begun offering regulated crypto-linked investments totaling 1.5 billion rubles in structured bonds and digital financial assets tied to Bitcoin, Ethereum, and broader crypto portfolios.

Deputy Chairman Anatoly Popov confirmed “active dialogue” with the Bank of Russia on integrating crypto services within regulated frameworks while building proprietary blockchain infrastructure.

As it stands now, the regulatory timeline calls for legislative frameworks to be completed by July 1, 2026, with liability for illegal crypto intermediary activities taking effect from July 1, 2027.

Recently, one of the biggest losses from on-chain scams occurred. An address poisoning attack, a fraud that takes advantage of how account-based blockchains manage transaction history and address reuse, caused a single user to lose almost $50 million in USDT.

Charles Hoskinson's comment

According to Charles Hoskinson, it would not have occurred on some architectures that are inherently more resilient to errors of this nature. This is how it came about.

Shortly after the money was taken out of Binance, the victim’s wallet, which had been active for about two years and was mostly used for USDT transfers, received close to $50 million. The user sent a brief test transaction to the intended recipient, which is what many would consider safe behavior. The full amount was sent a few minutes later. The incorrect address was used for that second transfer.

Earlier, the scammer had carried out an address poisoning attack by sending a small amount of USDT from a wallet designed to look like a real address the victim had previously used. The victim mistakenly chose the poisoned address rather than the correct one when they copied the address from the transaction history. As a result, $50 million was lost with just one click.

Why UTXO is better in these cases

Although it is probably going to be moved or exchanged, the stolen USDT is currently still at the destination address.

"This is another reason UTXO is awesome," Hoskinson said in response to the incident. He is not wrong. The account-based model that Ethereum and many other EVM chains employ directly leads to this type of scam. Addresses are displayed as free-form strings in transaction history, and wallets promote copying from previous exchanges. That is precisely what hackers take advantage of.

Chains like Bitcoin and Cardano that are based on the UTXO model function differently. Every transaction produces new outputs while consuming existing ones. Wallets usually create transactions from explicit UTXO selections rather than reused account endpoints, and users do not rely on copying destination addresses from account histories in the same manner. A persistent account state to visually poison does not exist.

This was not a protocol flaw or an exploit for smart contracts. It was a flaw in the design that interacted with human nature, and in less than an hour, it cost $50 million.

Coinbase CEO Brian Armstrong recently made an appearance at the Goldman Sachs Builders and Innovators Summit, where he discussed his journey as well as the current state of the industry. 

Armstrong's background 

Armstrong recalled that he was passionate about computer science as a kid, which is why he chose to pursue computer science. 

"My mom was a programmer at IBM. My dad was a civil engineer. I remember getting our first IBM 486 PC at home, and I loved it," he said. 

Armstrong recalled that he was learning how to use Linux and how to build early websites. 

"When I was in high school, I ended up taking some programming classes at a community college. When I went to college, I decided to study computer science," he recalled. 

Struggling to raise $1 million

He stated that Coinbase was not a "hot" company during the demo day at the YCombinator event. "It seemed like all these other startups were raising checks…I was trying to raise just $1 million…I was only able to get only $600K," he said. 

Armstrong revealed that he was "lucky enough" to run into a former FX trader at Goldman Sachs. That trader was Fred Ershem, who ended up co-founding the exchange with Armstrong. 

The current state of Coinbase 

As of today, as Armstrong recalls, Coinbase is now serving both retail customers and large institutions. "We also have a developer platform, so we are building infrastructure," he said.

The Coinbase boss believes that prediction markets and tokenized equities are the most promising areas as of now. 

He has discussed the potential of prediction markets to inform policy decisions and the benefits of tokenizing stocks, such as increased accessibility and 24/7 trading.

A new report by blockchain analytics firm AMLBot has revealed major differences in how the two largest stablecoin issuers, Tether and Circle, handle the freezing of crypto assets linked to illegal activity.

According to the report, between 2023 and 2025, Tether froze around $3.3 billion worth of USDT, while Circle froze about $109 million in USDC. This means Tether froze nearly 30 times more funds than Circle over the same period.

The report shows that Tether blacklisted 7,268 wallet addresses across multiple blockchains, including Ethereum and Tron. More than 2,800 of these freezes were coordinated with U.S. law enforcement agencies. A large portion of the frozen funds—over 53% of total USDT freezes—was found on the Tron network, which is commonly used for fast and low-cost stablecoin transfers.

One big difference highlighted in the report is Tether’s ability to burn and reissue tokens. In some cases, frozen USDT linked to scams or criminal activity was permanently destroyed, and new tokens were issued to return funds to victims or authorities. AMLBot reported that this process has been used in several large enforcement cases over the past two years.

Circle, which issues the USDC stablecoin, follows a more cautious and legally driven approach. During the same period, Circle blacklisted 372 addresses holding a total of $109 million. Circle only freezes funds when required by court orders, regulatory rules, or sanctions, and it does not burn or reissue tokens. Once frozen, USDC remains locked until legal approval is given to release it.

AMLBot explained that these differences reflect two very different enforcement philosophies. Tether works closely with law enforcement agencies and may freeze funds early in investigations to limit further losses. Circle limits its actions strictly to formal legal instructions.

The report also points out that while Tether’s proactive approach has helped recover funds tied to fraud, trafficking, and scams, it has raised concerns about centralized control and user rights. Circle’s model, while slower, is seen as offering clearer legal safeguards.

Overall, the findings show that stablecoins operate at the intersection of blockchain technology and traditional law enforcement, with each issuer choosing a different balance between speed, control, and legal certainty.