Bitcoin is trading below the average cost basis of U.S. spot Bitcoin ETFs after the products recorded their second- and third-largest weekly outflows last month, according to Galaxy’s head of research, Alex Thorn.
U.S. Bitcoin ETFs collectively manage about $113 billion in assets and hold roughly 1.28 million BTC, data from CoinGlass and BiTBO show. This puts the average cost basis at approximately $87,830 per Bitcoin.
At the same time, Bitcoin’s price fell about 11%, sliding from $84,000 on Saturday to a nine-month low near $74,600 in early Monday trading.
“This means the average Bitcoin ETF purchase is underwater,” Thorn said.
Across the past two weeks, the 11 spot Bitcoin ETFs recorded $2.8 billion in net outflows, including $1.49 billion last week and $1.32 billion the week before, according to CoinGlass.
Institutional investors hold firmer ground
Total assets under management for U.S. spot Bitcoin ETFs have fallen 31.5% from their October peak of $165 billion, while spot Bitcoin prices are down about 40% over the same period.
Despite the decline, institutional investors appear to be holding their positions. “They’ve been hodling,” said Galaxy’s head of research, Alex Thorn, noting that cumulative ETF inflows are down just 12% from their peak, compared with Bitcoin’s 38% price drop.
Weak demand fuels bear market concerns
Nick Ruck, director at LVRG Research, warned that Bitcoin could slide into a full-fledged bear market if a recovery does not materialize soon.
“The crypto market continues its sell-off as Bitcoin drops to around $76,000 amid elevated macroeconomic uncertainty, while the proposed U.S. CLARITY Act remains stalled,” Ruck told Cointelegraph.
“Despite former President Trump’s crypto-friendly nominee for the next Federal Reserve chair, investors are reducing risk exposure due to ongoing geopolitical tensions and dollar instability, as the U.S. economy grapples with rising unemployment and inflation,” he added.
“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.”
