Bitcoin ETFs Face Record Drawdown Since Launch

In a recent update from the market, CryptoQuant analysts have highlighted that total outflows from the all-time high (ATH) have reached a staggering $5.55 billion.

Key Takeaways

Total outflows from Bitcoin ETFs have hit $5.55 billion since their ATH.
Institutional investors often view ETFs as stable investments, but recent trends show significant capital outflow.
The current market conditions are testing the belief that institutional investors will always support the crypto market.
The leading player, BlackRock's IBIT, has recorded substantial single-day outflows.
Despite recent challenges, Bitcoin ETFs still have a strong cumulative net inflow of $56.62 billion.

Bitcoin ETFs See Largest Drawdown Since Launch

Overview of the Current Situation

Bitcoin supporters often claim that Exchange-Traded Funds (ETFs) represent "sticky capital." This means that institutional investors are thought to be more inclined to hold their investments. Prominent companies like BlackRock and Fidelity are believed to have long-term investment perspectives. Thus, ETF flows are typically considered more stable or "diamond hands," contrasting with retail investors who may sell off quickly.

However, this belief may soon be put to the test. The latest chart displays a drawdown that is significantly deeper than the major decline seen in March 2025. Notably, the red shaded area indicates a record low in capital outflow.

If Bitcoin's price (represented by the white line) continues to drop towards the ETF realized price (indicated by the grey line), many average institutional holders risk facing substantial losses.

In previous downturns, such as earlier drawdowns, the market typically rebounded quickly. Institutional investors often took advantage of these dips to buy back in.

Nevertheless, the current downturn illustrates that institutional investors are not immune to fear. Instead of holding their positions, they are opting to sell, which challenges the idea of continual institutional backing for Bitcoin.

According to the SoSoValue dashboard, there was a daily net outflow of $275.88 million as of December 26. The significant capital flight is primarily driven by BlackRock's IBIT, which registered an outflow of $192.61 million in just one day.

It’s important to note that despite these substantial outflows, Bitcoin ETFs still have an impressive cumulative net inflow of $56.62 billion. However, the ongoing narrative of “endless accumulation” of Bitcoin is currently under scrutiny.