Over 40% of Bitcoin Supply Currently Underwater Amid $600 Billion in Losses

In recent times, long-term Bitcoin holders have begun to sell their coins at a loss, indicating this trend may be more than just a fleeting occurrence.

Key Takeaways

Over 40% of Bitcoin's circulating supply is held at a loss.
U.S. buyers are increasingly hesitant, as indicated by the negative Coinbase Premium Index.
Bitcoin investment funds saw a net outflow exceeding $190 million recently.
The average cost basis for U.S. spot Bitcoin ETF investors is significantly higher than the current price.
Long-term holders are realizing substantial losses, marking a significant market shift.

Bitcoin

This article explores the significant losses in the Bitcoin market, where over 40% of the total supply is currently underwater. It examines factors contributing to the reluctance of U.S. buyers, the performance of Bitcoin investment funds, and highlights the ongoing losses experienced by long-term holders.

U.S. Buyers Remain Cautious

The Coinbase Premium Index for Bitcoin has been negative in recent weeks, signaling a significant withdrawal of American investors from the marketplace. CryptoQuant's data highlights that the price difference between Bitcoin on Coinbase and Binance reflects a hesitation among U.S. buyers to re-enter at current prices. This cautious stance is evident across various metrics, from trading volumes on exchanges to the performance of investment products.

BTC Coinbase Premium Index. Source: CryptoQuant

During the week ending March 27, global Bitcoin investment funds recorded more than $190 million in net outflows. Many spot Bitcoin ETFs, previously attracting substantial institutional interest, are now underperforming for numerous investors. Data indicates that the average cost basis for U.S. spot Bitcoin ETF investors sits at $83,400, considerably higher than the current trading price. At the time of this report, Bitcoin was priced around $66,820, which is approximately 47% below its peak of $126,000 reached in October 2025 and 24% down from its yearly open of $87,600.

Bitcoin trading at $66,830 on the 24-hour chart: TradingView

Close to 9 Million BTC Held at a Loss

Currently, nearly 9 million Bitcoin, which equals more than 40% of the total circulating supply, are held by investors who paid more than the current market price, according to on-chain data from Glassnode. The cumulative unrealized loss on this stockpile amounts to about $598 billion. Glassnode compares the present conditions to the second quarter of 2022, a notably challenging period for Bitcoin. At that time, around 3 million BTC had to be traded before the market could stabilize.

Bitcoin total supply in loss. Source: Glassnode

Reports from Glassnode’s latest Week On-chain newsletter indicate that in order to resolve this significant supply overhang, Bitcoin must transition from sellers realizing losses to new buyers willing to purchase at lower prices. At this moment, demand does not seem to match the supply. Capriole Investments' Bitcoin Apparent Demand metric recorded a reading of -1,623 BTC on Thursday, continuing to remain negative since mid-December 2025. CryptoQuant described the market as broadly distributing, heavily influenced by ongoing selling from retail investors.

Bitcoin long-term holder realized loss. Source: Glassnode

A noteworthy trend in the data involves investors who have held Bitcoin for more than 155 days. This group, often seen as the most dedicated segment of the market, is now selling at a higher rate at a loss. Glassnode observed that realized losses among long-term holders have increased to $200 million, indicating a significant capitulation among these investors.

Featured image from Meta, chart from TradingView