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The average investor in BlackRock's iShares Bitcoin Trust (IBIT) is now sitting on an unrealized loss of roughly 40%, as spot bitcoin ETFs just closed out their second-worst week on record.
The drawdown figure, <a href="https://charts.checkonchain.com/btconchain/etfs/etf_mvrv/etf_mvrv_light.html" rel="noopener noreferrer nofollow">highlighted by ETF MVRV data from CheckOnChain</a>, reflects the gap between the average cost basis of IBIT holders and bitcoin's current trading price. This is not a single-day loss but a cumulative measure of investor pain built up over weeks of declining prices. For related coverage, see <a href="https://marketbit.net/bitcoin-etfs-bought-3350-btc-worth-240m-yesterday-report/" rel="noopener noreferrer nofollow">Bitcoin ETFs Bought 3,350 BTC Worth $240M Yesterday: Report</a>.
That roughly 40% average drawdown puts IBIT holders deep underwater at a level that historically signals capitulation risk. When the typical buyer of a flagship ETF product is this far offside, forced selling and sentiment deterioration tend to accelerate. For related coverage, see <a href="https://marketbit.net/bitcoin-near-60000-xrp-tests-1-shib-pressure-eases/" rel="noopener noreferrer nofollow">Bitcoin Near $60K as XRP Tests $1 and SHIB Stabilizes</a>.
<h2 id="spot-bitcoin-etfs-just-posted-a-near-record-week-of-losses">Spot Bitcoin ETFs Just Posted a Near-Record Week of Losses</h2>
The individual IBIT pain point sits inside a broader collapse in spot bitcoin ETF performance. The group of U.S.-listed spot bitcoin ETFs, <a href="https://farside.co.uk/btc/" rel="noopener noreferrer nofollow">tracked by Farside Investors</a>, logged their second-worst week on record in terms of net outflows and price-adjusted returns.
Only one prior week since the January 2024 launch of spot bitcoin ETFs has been worse. The severity of this week's result underscores that outflow pressure is not isolated to a single fund but spans the entire segment, from IBIT to smaller competitors.
Heavy weekly outflows from bitcoin ETFs often coincide with periods where <a href="https://marketbit.net/kalshi-traders-bet-on-bitcoin-falling-to-50000-amid-market-volatility/" rel="noopener noreferrer nofollow">prediction market traders are positioning for further bitcoin downside</a>, reinforcing negative sentiment loops between ETF flows and broader market expectations.
The timing also follows a stretch where <a href="https://marketbit.net/bitcoin-mining-difficulty-drops-9-55-percent-second-largest-2026-adjustment/" rel="noopener noreferrer nofollow">bitcoin mining difficulty saw its second-largest downward adjustment of 2026</a>, adding to signals of stress across the bitcoin ecosystem.
<h2 id="what-the-drawdown-means-for-near-term-bitcoin-sentiment">What the Drawdown Means for Near-Term Bitcoin Sentiment</h2>
When the largest spot bitcoin ETF's average holder is down 40%, the product that was supposed to bring institutional stability to bitcoin is instead amplifying retail pain. IBIT attracted billions in inflows during bitcoin's rally phases, and many of those buyers are now trapped at much higher cost bases.
ETF-driven selling pressure matters because it feeds directly into spot markets. Unlike futures-based products, spot ETFs buy and sell actual bitcoin, so sustained outflows create real sell pressure on the underlying asset.
The combination of a near-record bad week and deeply underwater average holders creates a setup where any further price decline could trigger additional redemptions. That dynamic is worth watching alongside other demand signals, including whether institutional buyers like <a href="https://marketbit.net/strategy-added-1587-btc-100-million-bitcoin-purchase-report/" rel="noopener noreferrer nofollow">Strategy, which recently added 1,587 BTC in a $100 million purchase</a>, continue to accumulate at lower levels.
Previous periods of heavy ETF stress, such as when spot bitcoin ETFs were buying 3,350 BTC in a single day, eventually reversed the flow picture. Whether that pattern repeats depends on whether bitcoin finds a price floor that brings sidelined capital back into the market.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.<a href="https://marketbit.net/?p=15988" rel="noopener noreferrer nofollow">Read original article on marketbit.net</a>

Average IBIT Investor Down 40% as Spot Bitcoin ETFs Hit Second-Worst Week

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