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🐳 Daily Edition: ETF Flows, Tax Wash Traders Drive Major Growth to Start New Year

🐳 Daily Edition: ETF Flows, Tax Wash Traders Drive Major Growth to Start New Year

The ETFs have once again turned on the TWAP with the highest flows since October as Fear and Greed Index climbs out of fearful territory

Will McKinnon & Beluga
January 05, 2026

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Prices have flipped green as ETF flows return once again, with BTC and ETH ETFs posting their highest numbers since early October last week. We only have partial data on today’s numbers, however it looks like we’ll be continuing the trend. Given the only real potential “catalysts” for price action over the last few days have been US military action in Venezuela (international conflicts generally perceived as bearish for risk markets) and a new tax season, my intuition tells me what we’re seeing is likely entities re-purchasing the supply they sold to lock in capital losses for tax purposes. For anyone who doesn’t know, crypto traders can “wash trade” their holdings and then immediately rebuy them once the tax season turns over in order to lower their tax bill, whereas stock traders don’t have access to this strategy. At the end of the day green in the charts is good, but it is important to be cognizant of where the buying is likely coming from.

Interestingly, we also saw the crypto Fear and Greed Index (on CoinMarketCap) climb out of fear territory for the first time since October; the last time a move of this magnitude happened, Bitcoin went from $78k to over $110k in a month flat. Sentiment is definitely not an end-all-be-all indicator, but given the liquidity constraints of the crypto market, retail sentiment can be a major driver of price action. Combining this emotional upswing with continued positive flows from the ETF can work reflexively, putting us right back on track despite the months of blood we just experienced. This could also mean that new launches are back on the menu for traders, which is great timing considering Lighter’s recent TGE, MegaETH’s upcoming TGE (end of January?), and several other teams that have been attempting to time the market. Keep an eye out on our X feed and the Beluga Brief to get the scoop on all of these!