Bitcoin ETF Investors Return to Profit After Year-Long Slump
For the first time since January, the average investor in US spot Bitcoin ETFs has returned to profitability. This milestone came as Bitcoin's price surpassed the estimated average cost basis of $81,722 per coin, according to Bloomberg Intelligence analyst James Seyffart. He noted on X that investors were finally "back above water" after the recent rally pushed Bitcoin above this key level.
The turnaround coincided with the strongest single day of net inflows for these ETFs in 2023. On Monday, the funds attracted $998.95 million, with BlackRock’s IBIT leading at $381.37 million, followed by Ark and 21Shares’ ARKB with $289.12 million, and Fidelity’s FBTC with $238.84 million. As of Tuesday, Bitcoin was trading around $86,300, roughly 5% above the estimated cost basis, after a week-long gain of nearly 13%.
Analysts emphasized the significance of this shift, as investors who were previously underwater often sell as soon as they break even. David Wachsman, president of Hawkeye Digital, explained that much of this year’s demand had to absorb that selling pressure. With the average holder now profitable, that pressure is expected to ease.
However, Bloomberg Intelligence analyst Eric Balchunas cautioned that Monday’s reported inflows likely reflected Friday’s buying rather than Monday’s price move. This means the funds’ response to Monday’s rally may still be unfolding. The inflow day marked a sharp recovery from the week ending September 18, which saw just $6.2 million in net inflows, the smallest weekly total in 141 weeks of trading. Since their launch, these ETFs have cumulatively drawn $56.16 billion and now hold about $110.14 billion in assets, representing 6.3% of Bitcoin’s market capitalization.