Bitcoin slide triggers $7 billion unrealised losses as ETF redemptions intensify

Bitcoin’s slide beneath the $80,000 mark has left US spot exchange-traded fund investors nursing roughly $7 billion in unrealised losses and renewed concern about how ETF flows can amplify market moves, according to reporting by 99Bitcoins and corroborating industry data. The cryptocurrency briefly traded near $74,600 before recovering toward $77,000, a swing that squeezed buyers who entered the market near recent highs and coincided with a broader risk-off move across equities and digital assets.

US spot ETFs now control an estimated 1.29 million BTC, or about 6.5% of the maximum bitcoin supply, and that concentration has changed the dynamics of corrections. According to market observers cited by 99Bitcoins, the average ETF holder’s entry price sits near $90,000, leaving many positions roughly 15% underwater and increasing the likelihood of selling to break even when prices turn. That behaviour can convert ordinary pullbacks into steeper declines as funds face redemptions and liquidity thins.

The recent outflows underline the vulnerability. Data compiled by KuCoin and The Block show US spot ETFs suffered roughly $1.33 billion of net redemptions in a shortened four-day trading week, the largest weekly withdrawal since February 2025, with a single midweek day seeing more than $700 million exit. Cointelegraph and other trackers recorded a combined $681 million of outflows during the first full trading week of 2026, while wider digital-asset products experienced about $1.7 billion in weekly redemptions, according to Investing.com, erasing much of the net inflows accumulated since January 2024.

Analysts warn that absent fresh buying, rising redemption pressure could push bitcoin substantially lower. Some models referenced in industry commentary point to downside toward $65,000 if outflows intensify and equities remain under strain, because ETFs’ redemption mechanics and the speed of institutional trade execution can accelerate price discovery on the way down.

Not all large holders face the same constraints. Strategy, the company formerly known as MicroStrategy, holds bitcoin directly on its balance sheet and manages exposure through corporate financing rather than daily fund redemptions. Strategy stated it has acquired 855 BTC recently and reported a total holding of 713,502 BTC acquired for about $54.26 billion at an average price near $76,052 per bitcoin as of 1 February 2026, demonstrating a balance-sheet approach market participants say provides a larger shock absorber than typical ETF vehicles. The company’s structure removes the immediate need to liquidate holdings to meet investor flows, which is why some investors treat Strategy shares as a longer-term bitcoin proxy.

Macro factors are also influencing flows. CoinDesk noted that institutional interest in the basis trade weakened when the CME annualised basis fell below the risk-free rate of 5% in February 2025, reducing incentives for certain arbitrage strategies and contributing to periodic outflow episodes. Industry figures show that assets under management in digital-asset investment products have declined from an October 2025 peak by roughly $73 billion, illustrating how shifting risk appetite has affected liquidity.

For now, ETF flows remain the market’s focal point. Supporters of spot ETFs argue they have brought substantial new capital to bitcoin since their introduction, with cumulative inflows of tens of billions of dollars since January 2024, but recent weekly redemptions and the concentration of supply in regulated funds have revealed a new fragility in price dynamics. Market participants will be watching whether buying returns to absorb supply or whether further redemptions force deeper mark-downs.