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U.S. spot Bitcoin ETFs are seeing their sharpest pullback of the current market cycle, as falling prices and steady investor withdrawals weigh on fund balances. However, analysts say the broader institutional adoption trend remains intact despite the recent pressure.
According to Glassnode data, U.S. spot Bitcoin ETF balances have dropped by about 100,300 BTC since Bitcoin’s all-time high in early October. Total holdings now stand at roughly 1.26 million BTC.
The decline reflects continued net outflows over several months. Data from SoSoValue shows that $1.6 billion was withdrawn from these ETFs in January alone, extending a streak of monthly redemptions that began in November 2025. This marks the biggest balance contraction of the current cycle for U.S.-listed spot Bitcoin products.
The ETF decline has come alongside a broader market slowdown. After reaching a record high of $126,000 in October, Bitcoin has moved lower into 2026 and is now trading near $67,000. The drop has made investors more cautious across the crypto market.
While spot ETFs were widely credited with helping drive Bitcoin’s rally by bringing in institutional money, some analysts say they may also be adding pressure during downturns. Arthur Hayes recently said that institutional hedging and risk controls could be increasing selling pressure during periods of heavy redemptions.
Glassnode added that institutional selling has contributed to the ongoing weakness and reflects a wider risk-off mood in the market.
The pullback has left many ETF investors in the red. Glassnode estimates the average entry price for U.S. spot Bitcoin ETF investors is around $83,980 per BTC. With prices now well below that level, the average holder is facing unrealized losses of about 20%.
Outflows have also extended beyond Bitcoin. Digital asset investment funds have recorded four straight weeks of withdrawals, totaling about $3.7 billion during that period.
Despite the recent outflows, total net inflows into U.S. spot Bitcoin ETFs remain strong. Bloomberg senior ETF analyst Eric Balchunas noted that cumulative net inflows are still near $53 billion, down from a peak above $63 billion in October but still higher than early industry expectations.
Overall, the data suggests the current pullback is part of a normal cycle rather than a major shift. While short-term volatility may continue, Bitcoin’s role in traditional finance appears firmly in place.
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