U.S. Bitcoin ETF Holders Sit Deeply Underwater as Outflows Accelerate

Recent weakness in Bitcoin has pushed the typical holder of U.S. spot Bitcoin ETFs well into the red: independent estimates put the average ETF cost basis near $90,200 versus an approximate market quote of $76,800, implying roughly a 15% unrealized loss and about $13,400 of paper loss per coin. That gap raises the probability that shorter‑horizon speculators and momentum-driven owners will redeem ETF shares, a process that converts paper losses into actual sales of underlying BTC and can exacerbate downward price pressure. Net redemptions from listed spot ETFs have accelerated in recent months, totaling roughly $6.18 billion over the measured period and marking several consecutive months of outflows across the suite of 11 U.S. spot products. The dynamics became acute during a late‑January risk‑off episode when same‑day withdrawals were sizeable — about $818 million from BTC ETFs and roughly $156 million from ETH ETFs — coinciding with concentrated long liquidations and rapid deleveraging across derivatives venues. On-exchange order books showed a stiff resistive band near the mid‑to‑high five‑figure range (around $90,000) and a previously supportive bid cluster near $85,000–$87,500; once that pivot broke, visible depth evaporated and prices cascaded into the mid‑$70,000s. Compounding the fragility, combined major dollar‑pegged stablecoins have contracted to about $258 billion, reducing the on‑exchange dollar-equivalent buffer that often fuels fast dip-buying. In response to the squeeze, major ecosystem participants mounted tactical interventions — for example, an exchange publicly converted stablecoin reserves into BTC and committed to replenish a user‑protection fund up to a $1 billion target if it fell below an $800 million trigger — which helped blunt immediate tail risk but do not substitute for persistent demand. The interplay of episodic ETF withdrawals, thinner stablecoin liquidity, concentrated visible sell interest and mechanical margin‑driven liquidations creates a higher likelihood of volatile, execution‑challenging sessions for large traders. For portfolio managers and risk teams the priority is now active monitoring of redemption flows, spreads and order‑book depth; absent renewed sustained inflows, the market remains vulnerable to bouts of accelerated selling and wider execution costs. While longer‑dated institutional allocations may be relatively sticky and provide some ballast, the near term is characterized by elevated short‑term liquidation risk and a market structure that can magnify headline shocks into outsized price moves.