Bitcoin ETF Bloodbath: 62% Of Inflows Now Underwater As Price Plunges To $76,000

Bitcoin's brutal sell-off just turned the ETF party into a panic room. With the price crashing to $76,000, the majority of capital that flooded into spot Bitcoin ETFs is now holding bags.

The Red Sea of ETFs

Forget 'buying the dip'—this is a full-blown underwater expedition. A staggering 62% of all ETF inflows are sitting at a loss. That's not a minor correction; it's a systemic flush of hot money that chased the hype. Wall Street's shiny new crypto toys are getting a harsh lesson in volatility.

From Institutional Darling to Distressed Asset

The narrative flipped overnight. The same institutions that piled in for 'digital gold' and 'inflation hedge' are now staring at red dashboards. It turns out, a ticker symbol on a traditional exchange doesn't magically erase crypto's wild swings. The leveraged longs are getting liquidated, and the 'strong hands' thesis is being tested like never before.

The Liquidity Illusion

All that celebrated daily volume? It works both ways. The ETFs created a seamless exit ramp, and investors are stampeding for it. The product designed to bring stability through accessibility is now amplifying the sell-side pressure. A cynical take? The big funds got the liquidity they wanted—just not in the direction they planned.

This is the reckoning. The easy money has been made, and the hard truth remains: no financial instrument, no matter how neatly packaged, can suspend the fundamental laws of fear and greed in a free market. The only thing dipping now is the confidence of latecomers who thought traditional finance had tamed the beast.

62% Of US Bitcoin Spot ETF Inflows Now In Loss

In a new X post, on-chain analyst Checkmate has shared a chart discussing the latest situation related to the Bitcoin spot ETFs. Spot ETFs are investment vehicles that allow investors to gain indirect exposure to an underlying asset. Such funds are available for Bitcoin and other digital assets in many parts of the world, but the ones of interest here are those based in the United States. First approved back in January 2024, US BTC spot ETFs have been in operation for more than two years now, and in that time, they have witnessed significant growth.

Lately, however, the trend related to these funds has been one of net outflows as the wider cryptocurrency sector has gone through a bearish shift. Outflows in the last two weeks, in particular, have been quite intense.

Below is the chart posted by the analyst that shows the trend in the weekly netflow related to the Bitcoin spot ETFs, among other metrics:

From the graph, it’s visible that the Bitcoin spot ETFs have witnessed net outflow spikes of $1.33 billion and $1.49 billion during the last two weeks, representing the third and second largest outflow sprees in the history of these funds. Alongside the negative netflows, Bitcoin has plunged under the $80,000 level. The asset is now trading under the average cost basis of the spot ETFs (marked in the chart using the dashed line), meaning that the majority of capital stored in these funds is now being held at a loss.

In the netflow graph, Checkmate has highlighted which of the weekly inflow spikes are part of this loss of supply. It WOULD appear that the last green inflows are now sitting all the way back in late 2024, with all spikes since then underwater. “If you assume a cost basis of inflows on the day they occurred, 62% of ETF inflows are now underwater,” noted the analyst.

So far in the history of BTC spot ETFs, holders haven’t been underwater to a significant degree as BTC has generally gone up since their launch. During a phase in mid-2024, the cryptocurrency did dip below the cost basis of these traders, but even then, it never went too far below the line.

Given this, the latest breach of the Bitcoin spot ETF break-even level could end up being the first time that these investors would have to deal with the pain of a bear phase. It now remains to be seen how the netflow related to these investment vehicles will develop in the coming weeks.

BTC Price

Bitcoin fell to $75,000 on Sunday, but the asset has rebounded a bit to start the new week as its price is now floating around $77,800.