The drop in Bitcoin’s value below $80,000 has led to significant losses for US spot BTC exchange-traded fund (ETF) investors, amounting to $7 billion in paper losses. As per data from CryptoSlate, Bitcoin, the largest digital asset, fell to a low of $74,609 over the weekend due to liquidity concerns and a risk-off sentiment in global markets. The current price of BTC stands at around $77,649.
Galaxy Digital’s head of research, Alex Thorn, pointed out that Bitcoin is currently trading below the average cost basis of US ETFs, resulting in average paper losses of approximately 15% for spot Bitcoin ETF investors. This suggests an average entry price of about $90,200 per Bitcoin.
The recent price performance is causing concern among ETF investors, particularly since they include advisers and allocators who tend to rebalance their portfolios based on predefined rules. When investors are facing losses, they may engage in “sell-to-even” selling during rallies, further exacerbating the situation.
The total value of Bitcoin held by the 12 spot Bitcoin ETFs is estimated to be over $115 billion, with an average purchase price of around $90,200 per Bitcoin. This translates to an average loss of approximately $8,000 per Bitcoin, resulting in a total unrealized loss of about $7 billion for these investors.
The outflows from Bitcoin ETFs have been significant, totaling approximately $6.18 billion from November 2025 to January 2026, marking the longest monthly outflow streak since the launch of these products. These redemptions have been accompanied by large daily drawdowns, adding to the market volatility.
If the trend of outflows from ETFs continues, it could have a significant impact on Bitcoin’s price discovery. The market would need to absorb around 27,000-28,000 BTC per month to compensate for the net outflows from ETFs. This imbalance in supply and demand could further dampen sentiment and drive down the price of Bitcoin.
The relationship between ETF flows and price action in Bitcoin is closely linked, with ETF flows accounting for a significant portion of the variance in BTC returns. The average trade size for Bitcoin ETFs is relatively small compared to other asset classes, indicating a more retail-driven market.
Overall, the performance of Bitcoin ETFs and the continued outflows could pose challenges for Bitcoin’s price stability. If outflows persist, BTC could face headwinds that might push its price down further, potentially testing support levels around $65,500.
