On-chain data shows the Bitcoin spot price is now below the cost basis of nearly two-thirds of inflows into exchange-traded funds (ETFs).
In a new X post, on-chain analyst Checkmate has shared a chart discussing the latest situation related to the Bitcoin spot ETFs. Spot ETFs are investment vehicles that allow investors to gain indirect exposure to an underlying asset. Such funds are available for Bitcoin and other digital assets in many parts of the world, but the ones of interest here are those based in the United States. First approved back in January 2024, US BTC spot ETFs have been in operation for more than two years now, and in that time, they have witnessed significant growth.
Lately, however, the trend related to these funds has been one of net outflows as the wider cryptocurrency sector has gone through a bearish shift. Outflows in the last two weeks, in particular, have been quite intense.
Below is the chart posted by the analyst that shows the trend in the weekly netflow related to the Bitcoin spot ETFs, among other metrics:
Looks like inflows made since late 2024 are in loss | Source: @_Checkmatey_ on X
From the graph, it’s visible that the Bitcoin spot ETFs have witnessed net outflow spikes of $1.33 billion and $1.49 billion during the last two weeks, representing the third and second largest outflow sprees in the history of these funds. Alongside the negative netflows, Bitcoin has plunged under the $80,000 level. The asset is now trading under the average cost basis of the spot ETFs (marked in the chart using the dashed line), meaning that the majority of capital stored in these funds is now being held at a loss.
In the netflow graph, Checkmate has highlighted which of the weekly inflow spikes are part of this loss of supply. It would appear that the last green inflows are now sitting all the way back in late 2024, with all spikes since then underwater. “If you assume a cost basis of inflows on the day they occurred, 62% of ETF inflows are now underwater,” noted the analyst.
So far in the history of BTC spot ETFs, holders haven’t been underwater to a significant degree as BTC has generally gone up since their launch. During a phase in mid-2024, the cryptocurrency did dip below the cost basis of these traders, but even then, it never went too far below the line.
Given this, the latest breach of the Bitcoin spot ETF break-even level could end up being the first time that these investors would have to deal with the pain of a bear phase. It now remains to be seen how the netflow related to these investment vehicles will develop in the coming weeks.
Bitcoin fell to $75,000 on Sunday, but the asset has rebounded a bit to start the new week as its price is now floating around $77,800.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
Featured image from Dall-E, chart from TradingView.com
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