BlackRock's Bitcoin ETF Is $13 Billion Underwater
BlackRock's IBIT Bitcoin ETF is now $13 billion underwater in cumulative profit and loss, despite having reached a peak profit of $30 billion during Bitcoin's 2024–2025 bull run. The analysis reveals that IBIT’s shareholders, driven by relentless inflows even at market highs, locked in an average cost of $79,500 per Bitcoin—well above today’s $62,000 price. This contrasts sharply with Fidelity’s FBTC ETF, which is only $1.5 billion underwater due to earlier profit-taking. The data suggests a widespread failure among ETF investors to sell at peaks, revealing a dangerous psychological trap: the belief that 'this time is different' led to holding through the top, now resulting in deep losses. The same pattern repeats in Ethereum ETFs, with BlackRock’s ETH-A ETF down $6.4 billion. These findings highlight that institutional ETF holders—now more influential than miners or validators—are becoming a key market driver, and their capitulation could accelerate the bear market’s final phase. Meanwhile, SpaceX’s pre-IPO perps on Hyperliquid show early promise, with holder numbers doubling in a month, though the market remains small at $22 million total cap—proof of concept, not yet a revolution. The episode ends with a warning: in volatile markets, taking profits is not cowardice—it’s strategy.
BlackRock's IBIT ETF is $13 billion underwater due to buying at market peaks, with an average cost of $79,500 per Bitcoin.
Fidelity’s FBTC ETF is only $1.5 billion underwater because shareholders took profits during Bitcoin’s bull run.
ETF holders’ psychology is failing them: most didn’t sell at the top, leading to massive collective losses.
BlackRock’s ETH-A ETF is down $6.4 billion, with average cost at $3,900 vs. current price of $1,600.
The final phase of a bear market often involves mass capitulation—ETF holders may trigger accelerated outflows.
…and 3 more takeaways available in PodZeus
Welcome to The Breakdown: ETFs, IPOs, and Market Psychology
David Kanellis introduces the episode’s focus: analyzing Bitcoin and Ethereum ETF performance, ETF investor psychology, and the emerging pre-IPO market for SpaceX.
ETFs Are Not Just Funds—They’re Psychological Traps
“It is technically BlackRock dumping their holdings, but it's actually the shareholders that are doing it.”
IBIT Is $13 Billion Underwater: The Cost of Buying the Top
“The average cost of IBIT's Bitcoin is around $79,500. And we know now that Bitcoin is significantly under that as we're trading around $62,000.”
Fidelity’s Strategy: Selling the Top, Buying the Dip
Fidelity’s FBTC ETF is less underwater because its shareholders took profits during the bull run, unlike IBIT’s holders who kept buying at highs.
ETFs Are Now the New Market Movers—More Than Miners
Institutional ETF holders and digital asset treasury firms now dominate market dynamics, surpassing miners and validators in influence.
“The final phase of bear markets is usually a big capitulation downwards.”
“It is technically BlackRock dumping their holdings, but it's actually the shareholders that are doing it.”
“So perhaps take this as a warning for AI stocks moving forward that if you are in a position to take profits at any time, I would encourage you to do that.”
Host
David Kanellis
person
BlackRock
organization
IBIT
other
SpaceX
organization
Fidelity
organization
Hyperliquid
organization
FBTC
other
BlockWorks
organization
Anthropic
organization
OpenAI
organization
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