ETF dynamics change the game, with Bitcoin ETFs holding nearly 5% of supply.
The crypto market is reeling under extreme bearish conditions after the Bitcoin price fell more than 22% since the start of the year. As a result, Bitcoin ETFs’ Assets under Management (AuM) have dropped to $130 billion, while ETF expert and Bitwise CIO Matt Hougan blames OG Bitcoin hodlers for the current market predicament.
The Bitcoin sell-off hit hard in February, wiping out 40-50% from Bitcoin’s peak, and increasing talk of “crypto winter”. However, this “winter” market is unlike past bear markets.
While past bear seasons in the crypto market were mapped out long before they happened, this time, even the biggest cannot put their finger on what went wrong.
Bitcoin price now hovers around $68,000 – $70,000. Meanwhile, the bearish performance over the last few months triggered higher crypto winter mentions and this could cast a shadow over bullish expectations.
“Crypto winter” is not a new term. The big ones (2018 and 2022) lasted around 12-18 months, with prices slowly bleeding out more than 80%. In bear markets, trading volume drops by a significant amount, and liquidity dries up almost completely.
However, a crypto market winter is not only just a down market, but it’s also an entirely new kind of market dictated by complete shifts in supply-demand dynamics, capital flows and sentiment.
The current Fear & Greed Index sits at 9, signaling that sentiment is already negative. In the past, investor psychology broke before the price fully adjusted.
XWIN research suggests that Bitcoin will continue to decline. However, data from DeFi Llama shows the opposite.
The total stablecoin market cap is at an all-time high ($307.8 billion), following the expansion from late 2024. Over the past day, the marketcap increased by 0.64% (+$1.958 billion).
What’s more, stablecoin inflow into exchanges has doubled since late December, despite persistent selling pressure.
As of late December, the weekly stablecoin inflows, which ranged around $51 billion, have now surged to $98 billion. This signals that the crypto market capital inflow has surged in recent weeks.
Nevertheless, selling pressure and weak demand appear to be the main factors holding back the market while absorbing capital influxes.
In an interview on CNBC, Bitwise Asset Management CIO Matt Hougan pinned the current crypto market freefall on early Bitcoin investors, while refuting any claim that ETF investors could be offloading their BTC.
According to Hougan, the “OG” Bitcoin investors have been trimming their positions over time, driving prices lower, and as a result, Bitcoin ETF AuM have dropped to $130 billion.
Spot Bitcoin ETF netflow shows a net positive inflow of $145 million over the last day and week, suggesting that Hougan may be right about ETF investors not dumping BTC.
While XWIN Research presents a compelling argument for why the crypto market is headed into a “winter” stage, and if it were another year, they would be right.
But here is where 2026 might break the pattern. In the past bear markets, ETFs were still under deliberation by the SEC and had not taken such a sizeable impact on the market as they do currently.
As of February 10, 2026, all Bitcoin ETFs collectively hold 974.48K BTC, constituting over 4.8756% of the total Bitcoin circulating supply. Incorporating this data into the current crypto market transforms it into a unique cycle.
What’s more, despite the drop in Bitcoin price, Santiment data records a 19.09% increase in some altcoins and Bitcoin Daily Active Addresses (DAA), and a 7.19% rise over the past week. This suggests that investors are not going anywhere. If anything, they are picking up more BTC in this dip.
Analysts are calling for a $50,000 and even $40,000 Bitcoin price. However, even if that happens, the current crypto market still won’t constitute a “winter” as other metrics do not align.
ETF flows are currently not as bearish compared to the general market state, which means diamond hands may get rewarded when the thaw comes.
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