Bitcoin ETF suffers worst decline in over year - and new investors are now sitting on ugly losses

By Christine Idzelis

As investor appetite for bitcoin has faded this year, the iShares Bitcoin Trust has posted net outflows of about $34 million through Wednesday, FactSet data show

Bitcoin prices nosedived on Thursday, dragging crypto ETFs along for the ride

Bitcoin-linked exchange-traded funds plunged Thursday after the underlying asset descended below a widely watched support level, extending losses for funds that many investors use as a simple way to gain exposure to the world's most popular cryptocurrency.

The iShares Bitcoin Trust ETF IBIT was down more than 13%, registering its largest one-day drop since Aug. 5, 2024, according to Dow Jones Market Data. Shares of the fund have plummeted 27.3% this year through Thursday.

Investors had been watching $70,000 as a technical support level for bitcoin (BTCUSD), which it tumbled through on Thursday to trade below its 50-day moving average.

The cryptocurrency is "a momentum market," meaning prices are heavily driven by sentiment, which can work against investors when risky assets see intensified selling, said Jim Ferraioli, director of crypto research and strategy at Charles Schwab, in an interview Thursday. Bitcoin also tends to decline when technology and AI-related stocks are falling sharply, as they were Thursday, he noted.

Selling pressure has gathered steam as spot bitcoin ETFs have broken below the average price many investors originally paid - around the low $80,000s for the cryptocurrency, according to Ferraioli. That means a growing number of ETF holders are now sitting on sizable losses.

Investor appetite for bitcoin has faded in early 2026. The iShares Bitcoin Trust ETF - the largest ETF tracking the asset - has posted net outflows this year of about $34 million through Wednesday, FactSet data show. The fund saw roughly $528 million in outflows in a single day on Feb. 2, followed by relatively muted interest among investors buying a further dip in prices over the following two sessions.

The iShares Bitcoin Trust, which had more than $56 billion in assets under management as recently as Wednesday, serves as a proxy for sentiment around bitcoin ETFs. On Thursday, the fund's shares finished 49.4% below their 52-week closing high on Oct. 6, according to Dow Jones Market Data.

Other large bitcoin ETFs also suffered substantial losses Thursday.

The Fidelity Wise Origin Bitcoin Fund FBTC, which had around $15 billion in assets under management, slumped more than 13%, according to FactSet data. The Grayscale Bitcoin Trust ETF GBTC, with around $12 billion in assets, similarly plunged 13.2% on Thursday.

The Fidelity bitcoin ETF has seen more than $900 million of outflows this year through Wednesday, while investors have pulled $575 million from the Grayscale fund in 2026 through the same date, FactSet data show.

Bitcoin was plunging more than 13% on Thursday to trade around $63,300, according to FactSet data, at last check.

Selling in precious metals is believed to have contributed to Thursday's crypto selloff, due to the liquidation of futures contracts tied to bitcoin that traders held as collateral against positions in popular bets on gold (GC00) and silver (SI00), said Ferraioli.

-Christine Idzelis

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02-05-26 1721ET