Bitcoin has weakened relative to the average entry price of U.S. spot Bitcoin ETFs after back-to-back, outsized outflows last month, according to Galaxy Digital’s research lead, Alex Thorn. The broader snapshot shows U.S. spot BTC ETFs collectively managing roughly $113 billion in assets and holding about 1.28 million BTC, suggesting an average cost basis near $87,830 per coin. In parallel, the native price of Bitcoin slid from roughly $84,000 on Saturday to a nine-month trough around $74,600 in early trading on Monday, underscoring a risk-off mood among large holders. Thorn noted that the combination of price action and fund-level losses implies that a sizable portion of those ETF purchases are currently underwater.
Key takeaways
- The eleven spot BTC ETFs recorded $2.8 billion in net outflows over the past two weeks, with about $1.49 billion pulled in the last week and $1.32 billion the week before, highlighting persistent selling pressure from institutional buyers.
- Total U.S. spot BTC ETF assets under management have fallen about 31.5% from the October peak of $165 billion, while Bitcoin itself has traded down roughly 40% from that era, signaling a broader drawdown in demand.
- Thorn emphasized that the ongoing outflows have left the average ETF purchase underwater, reflecting the price moves and discount to cost basis in a difficult macro backdrop.
- The outflow momentum coincides with a sharp drawdown in BTC price to near $75,000, reinforcing concerns about whether institutional appetite can re-emerge soon.
- Analysts point to macro headwinds and regulatory friction, including stalled U.S. CLARITY Act discussions, as factors shaping risk sentiment and de-risking behavior among investors.
- Market observers warn that if demand remains tepid, Bitcoin could face further bearish pressure, with technical indicators signaling potential longer-term selling dynamics absent a fresh catalyst.
Tickers mentioned: $BTC
Sentiment: Bearish
Price impact: Negative. Bitcoin’s slide to a sub-$75k level reflects a broader retreat in risk assets as institutional demand softens and liquidity conditions tighten.
Trading idea (Not Financial Advice): Hold
Market context: The move sits within a broader backdrop of tighter liquidity and heightened macro and geopolitical uncertainty. The U.S. regulatory environment is in focus as the CLARITY Act stalls, while markets weigh the potential for policy shifts and their impact on crypto risk appetite.
Why it matters
The ongoing outflow pressure from spot BTC ETFs matters because it signals a tilt in institutional participation, which has historically been a key driver of price stability and liquidity in the market. With BTC ETF assets under management retreating from their late-2023 highs and the average cost basis for ETF purchases underwater, the calculus for large investors has shifted toward caution rather than accumulation. In practical terms, this reduces readily available demand at a time when crypto markets are contending with macro headwinds, including inflation dynamics, dollar strength, and geopolitical tensions that influence risk sentiment.
From a market structure perspective, the liquidity environment appears tighter, with ETF cash flows acting as a barometer for institutions weighing crypto allocations against competing risk assets. For many market participants, the latest data points reinforce a narrative of a cautious stance rather than a renewed round of aggressive investment in spot BTC products. The stall in U.S. regulatory progress, particularly around crypto legislation, adds another layer of uncertainty that could delay a meaningful improvement in demand dynamics unless a clear, favorable policy signal emerges.
Critically, the price action and fund flows converge on a theme: the market is sensitive to macro shocks and policy signals, and even seemingly large ETF markets can swing quickly if investor risk appetite shifts. The bear-case scenario outlined by some observers—namely, a continuation of price declines coupled with persistent ETF outflows—reflects a broader tension between perceived value and required catalysts to re-engage institutional buyers.
What to watch next
- Next two weeks: Monitor ETF outflows or any signs of reversal in monthly flow data, as close watchers watch for a potential stabilization of AUM levels.
- BTC price action around key support zones near the mid- to high-$70k range and whether a counter-move or further breakdown occurs.
- Regulatory developments in the U.S., particularly any updates on the CLARITY Act or other crypto policy initiatives that could influence risk sentiment.
- Macro data releases (inflation, employment) that might shift liquidity expectations and risk tolerance for crypto assets.
Sources & verification
- AUM and BTC-holding figures for U.S. spot Bitcoin ETFs (approximately $113 billion and 1.28 million BTC, respectively) as reported by Coinglass and BiTBO.
- Outflow data for spot BTC ETFs totaling $2.8 billion over the last fortnight, with monthly breakdowns from CoinGlass.
- Quotes and analysis from Galaxy Digital’s Alex Thorn about ETF cost basis and the underwater nature of purchases.
- Market commentary on the stalled U.S. CLARITY Act and the related implications for market sentiment.
Market reaction and key details
Bitcoin (CRYPTO: BTC) traded below the average cost basis of U.S. spot Bitcoin ETFs after back-to-back weeks of heavy outflows, a scenario highlighted by Galaxy Digital’s head of research, Alex Thorn. The sector-wide ETF exposure remains sizable—about $113 billion across US spot BTC ETFs, with holdings totaling roughly 1.28 million BTC, pointing to an implied average cost basis around $87,830 per BTC. In parallel, the asset itself declined from around $84,000 on Saturday to a nine-month low near $74,600 in early Monday trading, underscoring a shift in risk appetite among large holders. Thorn’s observation that the ETF purchases are effectively underwater captures the tension between the asset’s spot performance and the cost price embedded in the ETF universe.
Data compiled by CoinGlass show the eleven spot BTC ETFs recorded $2.8 billion in outflows over the past two weeks, including $1.49 billion the prior week and $1.32 billion the week before. This two-week window marks the second and third-largest outflow bursts in the recent cycle, illustrating how quickly sentiment can turn when macro cues deteriorate or liquidity tightens. The combination of substantial outflows and a price retreat amplifies concerns about whether institutional demand can reassert itself without new catalysts.
The pace of outflows has implications for the broader narrative around institutional participation in crypto markets. Thorn noted that while ETF cumulative inflows remain down from their peak, they have declined by about 12% from that peak, while Bitcoin itself has contracted by roughly 38%. In other words, even as ETF investors remain net-positive over longer horizons, the near-term picture is more negative on price and demand. The stall of regulatory momentum in the U.S.—including the prolonged, unresolved discussions around the CLARITY Act—adds to the sense that investors are being cautious and selective about new allocations.
“BTC may enter into a bear market if it continues to drop further, as technical indicators showcase long-term sell pressure patterns forming if demand doesn’t recover soon.”
As the market absorbs these dynamics, analysts like Nick Ruck of LVRG Research warn that Bitcoin could slip into a more pronounced downcycle if recovery does not arrive promptly. He pointed to macro uncertainty and the interplay of geopolitical conflicts and dollar instability as contributing factors to a de-risking mood among investors, even as some observers continue to monitor for any signal of a fundamental shift in demand. In this context, the next few weeks could prove decisive for whether the downward pressure loosens or intensifies further.
