Spot Bitcoin ETF investors are facing mounting paper losses, raising the risk of redemptions if the market fails to recover.
Bitcoin’s recent drop to $76,366 has left U.S.-listed spot ETF holders down roughly 15% on average. Estimates from Bianco Research and 10x Research suggest these investors bought BTC at around $90,200, leaving them with an unrealized loss of about $13,400 per coin.
These losses could prompt short-term traders and speculators to redeem their ETF shares, potentially intensifying selling pressure in the broader crypto market.
ETF demand has already weakened since the October 8 crash, which social media largely blames on Binance, the largest cryptocurrency exchange by volume and open interest. January marked a third consecutive month of net outflows—the first such streak since the U.S. ETFs launched. Over this period, the 11 spot Bitcoin ETFs saw a combined net outflow of $6.18 billion, according to SoSoValue.
A prolonged bear market could trigger a wider capitulation, with long-term holders liquidating positions and trading volumes surging—a pattern historically observed at the peak of bear phases.
Analysts caution, however, that institutional ETF capital is typically “sticky,” intended for the long term. While redemptions may rise, a full-scale capitulation is considered unlikely.
