Recently, Bitcoin exchange-traded funds (ETFs) have continued to experience capital outflows, exposing a troubling phenomenon within the cryptocurrency market structure—the price range that should theoretically attract buyers back has instead become the area where some investors are most concentrated in selling.
According to data from K33 Research, U.S. spot Bitcoin ETFs saw a net outflow of $1.7 billion over the five trading days ending Monday, marking the ninth-largest single-week outflow record since their launch in early 2024. This timing is no coincidence, as the sell-off coincided with Bitcoin’s price approaching $83,000—the average cost basis at which ETF holders as a whole roughly break even.
K33’s analysis shows that when the Bitcoin price nears the purchase cost of most ETF investors, the probability of a “large outflow day” rises to over 10%; whereas when the price is significantly above the cost basis, this probability is only about 3%. Vetle Lunde, Head of Research at K33, stated: “When the Bitcoin price approaches its holding cost, large outflow days occur more frequently. We believe this is because market participants are trying to avoid losses.”
This selling pressure comes from two directions: investors who have fallen back from highs near the cost line sell to avoid turning profits into losses; investors who have rebounded from lows near the cost line choose to stop losses after significant drawdowns. The holding cost acts more like a “ceiling” than a “floor of support.” Notably, $83,000 is also close to Bitcoin’s 200-day moving average. CryptoQuant analysts point out that Bitcoin has historically tended to face resistance near this threshold—for example, after rebounding to this level in March 2022, the price came under pressure and fell again.
Bitcoin is currently trading at only about $77,600, far below its all-time high of over $126,000. Compiled data shows that as of Wednesday, investors have pulled approximately $1.1 billion from related funds this week. ETFs, once hailed as a bridge connecting cryptocurrency and traditional finance, have now become an efficient tool for investors to exit the market.
K33 data indicates that institutional investors reduced their Bitcoin ETF holdings by 26,733 BTC in the first quarter, while retail investors increased theirs by 19,395 BTC. The institutional selling was primarily led by funds such as Millennium and Jane Street. K33 believes this is mainly due to compressed cryptocurrency yields and the emergence of more opportunities in other markets. The current market is in a delicate state: on one hand, large-scale mechanical buy orders support the bottom; on the other hand, the market tends to sell on every rebound, making market momentum exceptionally difficult to sustain, whether prices are rising or falling.
If you want direct exposure to digital currency demand, cryptocurrency can be a good investment. A safer but potentially lower-return option is to buy shares of companies that have business connections to cryptocurrency. Between these two extremes, some cryptocurrencies now have exchange-traded funds (ETFs) that trade at spot prices.
Multiple factors suggest that cryptocurrency is not always a safe investment. However, there are also other signs that cryptocurrency is here to stay. The key point—as with all other investments—is to thoroughly research the cryptocurrency you plan to buy.
