Bitcoin’s rally, which once attracted a wave of new investors through easily accessible ETFs, has officially turned downward. Investors who invest in U.S. exchange-traded funds (ETFs) that provide direct exposure to cryptocurrencies are currently in the red overall. Sean Rose of Glassnode said the average cost benchmark for all ETF inflows was about $89,600 — a mark that Bitcoin fell below on Tuesday.
The $89,600 figure reflects the flow-weighted average price of all inflows into the Bitcoin ETF since its launch. When Bitcoin trades below this level, this group of investors suffers losses. As of 9:20 a.m. London time, the largest virtual currency had narrowed its losses and was trading at about $91,000.
This fall below the key price level is a test of endurance for both retail and institutional investors. In the past year, many investors took advantage of this trend because they were optimistic that cryptocurrencies would still have room to rise in the future. ETFs have been praised as a "safer, regulated" way to invest in digital assets, but recent price drops are a reminder that cryptocurrencies' notorious volatility has not gone away even as Wall Street institutions get in on the action.
During Bitcoin’s rise, 12 Bitcoin-focused spot ETFs absorbed tens of billions of dollars in new assets; however, since November, net outflows from these ETFs have reached approximately $2.8 billion.
Nick Ruck, director of LVRG Research Company, said: "Bitcoin's sharp decline has caused most institutional buyers to fall into losses for the first time in 2025. If market sentiment cannot stabilize soon, it may trigger more capital outflows."
This juncture also highlights how quickly optimism in the cryptocurrency market fades. After hitting a record high in early October, Bitcoin is now down about 30% - a pullback driven by a combination of risk-averse traders exiting the market and long-term holders cashing out.
While cryptocurrencies are notoriously volatile, the decline was unexpected on Wall Street given the influx of institutional money into the space since Donald Trump won the presidential election.
Billions of dollars have poured into Bitcoin-focused ETFs this year, and the popularity of such products has led issuers to launch funds not only targeting Bitcoin (the largest cryptocurrency) and its “sibling” Ethereum, but also to develop other products. Data compiled by Bloomberg show that there are currently more than 110 cryptocurrency-related ETFs trading in the U.S. market.
As cryptocurrencies as a whole move lower (with many smaller coins down more than 50% this year), losses are spreading across the ETF space. Data from CoinGecko shows that since Bitcoin’s price peaked, $1.2 trillion has been wiped out from the combined market value of all digital tokens.