A recent downturn in the cryptocurrency market has left the average Bitcoin ETF investor underwater, as significant outflows have been recorded over the past two weeks. Bitcoin ETFs have experienced net outflows for 10 consecutive trading days, with investors choosing to redeem their holdings amidst the retracement after buying in at higher levels.
Heavy Outflows Indicate Fading Confidence
Data indicates a substantial reversal in Bitcoin ETF investments, with nearly $2.8 billion pulled out in just two weeks. In the week leading up to January 25, 2026, Bitcoin funds alone saw outflows of approximately $1.1 billion, while total crypto fund outflows reached $1.73 billion, marking the largest weekly withdrawal since mid-November. January concluded with estimated net outflows of $1.1 billion, continuing a trend observed in December 2025. This sell-off has coincided with a sharp downturn in the broader crypto market, as Bitcoin slid to a nine-month low. On January 29, Bitcoin ETFs registered net daily outflows of $817.87 million.
Which ETFs are seeing the most Outflows?
BlackRock's iShares Bitcoin Trust (IBIT), the largest product by assets, experienced the most significant withdrawals, with $317.81 million in net outflows. Fidelity's FBTC and Grayscale's GBTC also saw notable outflows of $168.05 million and $119.44 million, respectively.
Average Buy-in Cost Exceeds Current Price
The average cost basis for all U.S. Bitcoin ETFs is around $90,200. With Bitcoin's price recently dipping to around $82,300, many investors who bought into the ETFs are now facing losses. According to Jim Bianco, a macro investment research analyst at Bianco Research, investors who have held ETFs since their launch are down by about 8.5%.
Factors Behind the Downturn
Several factors contributed to this downturn, including dwindling expectations for interest rate cuts, negative price momentum, and disappointment that digital assets have not participated in the "debasement trade". The "debasement trade" refers to positioning in assets expected to preserve value amid inflation and currency dilution.
Potential for Rebound
Despite the current negative sentiment, historical patterns suggest a potential for rebound. In previous instances when the Bitcoin price fell below the ETF's average purchase level, the cryptocurrency consolidated around that point before staging a strong recovery. According to Bianco Research data, major drawdowns have consistently eased at the combined average purchase price for strategy and spot BTC ETFs, which currently sits at $84.5K. However, analysts caution that bearish conditions could continue with lower price targets.