Bitcoin ETFs “Hanging In There” Despite Four‑Month Price Decline, Analyst Says
Spot‑linked Bitcoin exchange‑traded funds (ETFs) in the United States have seen sizable paper losses, but inflows remain strong enough to keep the products afloat, according to market analysts.
Market backdrop
Since the start of the year, Bitcoin (BTC) has entered a prolonged downtrend, slipping more than 20 % in the last 30 days and trading near the $70,500 mark. The slide has translated into a paper loss of roughly 42 % for investors in the newly launched U.S. spot Bitcoin ETFs, which first became available in January 2024.
Despite the pain, ETF analyst James Seyffart observed on X (formerly Twitter) that the funds are “still hanging in there pretty good.” He highlighted that current outflows are modest when measured against the massive inflows recorded at the market’s peak.
Flow numbers
- Peak net inflows (Oct 2023): ~ $62 bn
- Current net assets (Feb 2026): ~ $55 bn
Preliminary data from Farside Investors confirm the figures, indicating a contraction of about $7 bn from the high‑water mark. Seyffart described the remaining asset base as “not too shabby,” especially given the broader crypto market weakness.
Investment researcher Jim Bianco added that the average spot Bitcoin ETF holder is now roughly 24 % underwater but, collectively, investors have chosen to retain their positions rather than liquidate en masse.
Historical perspective
Crypto analytics account Rand noted that the recent three‑month streak of net outflows marks the first time in the product’s brief history that such a pattern has emerged. However, the outflows remain far smaller than the inflows that built the $62 bn pool earlier in the year.
Contrasting viewpoints
Other market voices argue that the current sentiment may be overly pessimistic. ETF analyst Eric Balchunas reminded his followers that Bitcoin’s total return since the start of 2022 exceeds 400 %, dwarfing gold’s 177 % and silver’s 350 % over the same period. He suggested that many investors are “very short‑sighted” by focusing on the recent slump rather than the longer‑term outperformance.
Conversely, CryptoQuant CEO Ki Young Ju warned that bearish sentiment is now widespread among Bitcoin analysts, hinting that the next move may be heavily influenced by sentiment shifts.
What the data imply
- Resilience of capital: Even with the steepest drawdown since the products’ inception, a majority of capital remains in the funds, indicating a base of conviction among institutional and retail investors alike.
- Potential for rebound: Should Bitcoin recover its price, the existing asset base could quickly translate into inflows, as the market historically reacts aggressively to upside moves.
- Risk of further outflows: Persistent price weakness could trigger a delayed wave of redemptions, especially if alternative crypto‑linked products (e.g., futures ETFs or direct holdings) become more attractive.
Key Takeaways
| Point | Explanation |
|---|---|
| ETF assets still sizable | Net assets stand around $55 bn, only a modest decline from the October peak. |
| Average holder underwater | The typical investor faces a 24 % unrealized loss, yet most are holding. |
| Three consecutive months of outflows | First occurrence in the ETF’s history, but the volume is relatively small. |
| Long‑term performance advantage | Bitcoin’s >400 % gain since 2022 outpaces traditional safe‑haven assets, a fact some analysts stress. |
| Sentiment split | Some market participants view the dip as a buying opportunity, while others warn of a bearish trend. |
Outlook
The next few weeks will be pivotal. A stabilization or reversal in Bitcoin’s price could bolster confidence and possibly reignite fresh inflows into the spot ETFs. Conversely, a continued decline may test the resolve of current holders and could accelerate outflows, especially if alternative investment vehicles gain traction.
For investors and observers, monitoring both price action and the net flow data will be essential to gauge whether the “hanging in there” phase turns into a resurgence or a gradual unwind.
Source: https://cointelegraph.com/news/bitcoin-etf-flows-performance-btc-downtrend-analyst?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
