Investors in spot Bitcoin ETFs are now sitting on paper losses, creating the risk of redemptions if the market fails to stabilize.

Bitcoin’s recent drop to $76,366 has left U.S.-listed spot ETF holders down roughly 15% on average. Estimates from Bianco Research and 10x Research indicate these investors bought BTC around $90,200, leaving them with an unrealized loss of about $13,400 per coin.

Such losses could prompt short-term traders and speculators to redeem ETF shares, adding potential downward pressure on the broader crypto market. Demand for ETFs has already weakened since the October 8 crash, widely linked on social media to Binance, the largest cryptocurrency exchange by volume and open interest. January marked a third consecutive month of net outflows—the first streak of its kind since the U.S. ETFs launched—with the 11 spot Bitcoin ETFs recording a combined net outflow of $6.18 billion, according to SoSoValue.

If the bear market deepens, a broader capitulation could follow, with long-term holders liquidating positions and trading volumes surging. Analysts caution, however, that institutional ETF capital is typically “sticky” and long-term oriented, making a full-scale sell-off unlikely.