US Spot Bitcoin ETF Investors Face Growing Unrealized Losses as Demand Stalls

US spot Bitcoin ETF investors, once viewed as a stable source of long-term demand for Bitcoin, are increasingly under pressure as prices continue to drift lower. Recent on-chain data suggests that these investors are now sitting on notable unrealized losses, highlighting a key vulnerability in Bitcoin’s post-ETF market structure.

According to Glassnode data, the average cost basis for US spot Bitcoin ETF buyers is around $84,100 per BTC. With Bitcoin currently trading near $78,600 after briefly falling below $75,000, ETF holders are facing paper losses of roughly 8% to 9%. For many mainstream investors who entered the crypto market through regulated ETF products, this drawdown represents an ongoing test of conviction rather than a short-term shock.

These losses are already reflected in ETF flow data. After strong inflows at the start of January, sentiment shifted sharply. Over the past two weeks, US spot Bitcoin ETFs have recorded between $2.8 billion and $3 billion in net outflows. Weekly redemptions exceeding $1.3 billion have pushed cumulative flows back into negative territory, erasing much of the early-year optimism.

Selling pressure has been especially heavy in major funds such as BlackRock’s IBIT and Fidelity’s FBTC, signaling that even the largest and most liquid products are not immune. Although there was a brief single-day inflow in early February, it failed to reverse the broader downtrend. Analysts note that ETF flows are not meaningfully “buying the dip,” with institutional demand increasingly concentrated among a shrinking group of balance-sheet-driven buyers.

At the same time, Bitcoin is trading more than 35% below its 2025 peak near $126,000, while macro narratives that once supported higher prices have weakened. Tight liquidity, restrictive financial conditions, and Bitcoin’s failure to respond to dollar weakness or geopolitical risk have left the market directionless. Unlike previous cycles, the current environment is marked less by panic and more by apathy, with investors choosing to wait rather than aggressively buy or sell.

Without a clear catalyst such as renewed ETF inflows, easing liquidity, or a fresh narrative, this feedback loop may persist. Still, with US spot Bitcoin ETFs holding over $100 billion in assets, they remain a significant pillar of long-term capital in the crypto market.