Bitcoin ETFs experience a 60% decline, resulting in a $100 billion precarious situation.

Bitcoin is currently priced around $86,000 as losses accumulate across ETFs, treasury firms, and miners.

As per Checkonchain’s December 15 “System Stress” report, investors are facing approximately $100 billion in unrealized losses.

Bitcoin system stress (Source: Checkonchain)

Miners are reducing their hashrate, numerous treasury-company stocks are trading below their Bitcoin book value, and around 60% of spot Bitcoin ETF inflows are currently at a loss.

Checkonchain’s analysis of ETF average inflow cost basis and ETF market value to realized value (MVRV) indicates that the ETF cost basis and the True Market Mean are situated in a similar range, approximately $80,000–$82,000.

This positions a significant portion of institutional investments close to breakeven.

These benchmarks are significant as they link price movements to balance sheets rather than mere chart patterns.

When the price hovers at or below the overall cost basis, realized losses can increase, and liquidity may diminish as participants exit their positions during price recoveries.

When this range is shared by groups that had become essential sources of demand in 2024 and 2025, the market must assess whether institutional positioning acts as a cost-basis support.

It could also turn into a downside trigger if that level is breached.

Glassnode establishes a comparable framework

In its Week On-Chain report for week 49, Glassnode noted that Bitcoin has been fluctuating between the short-term holder cost basis near $102,700 and the True Market Mean around $81,300.

It identified $95,000 (the 0.75 cost-basis quantile) as an initial reclaim level.

Bitwise also positioned the True Market Mean near $82,000 as a support reference.

It outlined a support channel ranging from approximately $82,000 down to $75,000, linking that range to the IBIT cost basis near $81,000 and Strategy’s cost basis near $75,000.

Bitcoin ETF cost basis (Source: Bitwise)

Bitwise estimated unrealized losses to be around $152 billion (approximately 6.6% of market cap) following a roughly 35% decline, bringing total losses to about $765 billion.

A stress factor is the amount of ETF capital within the $75,000 to $85,000 range.

The overall spot Bitcoin ETF cost basis is about $80,000 under approximately $127 billion of capital.

However, only 2.9% of that capital is situated in the $75,000–$85,000 range, resulting in a thinner buffer if the price falls below the central cluster.

Amberdata also identified a denser “fortress” zone at $65,000–$70,000 that encompasses 15.2% of ETF capital.

This distribution could lead to quicker downside movements if the market moves through the $75,000–$85,000 gap.

Loss realization is already high even during price recoveries

Glassnode reported that entity-adjusted realized loss (30-day simple moving average) is near $555 million per day, the highest level since the FTX-era unwind.

This is occurring even as prices have rebounded from late-November lows into the low-$90,000s.

The same report indicated the relative unrealized loss (30-day SMA) at approximately 4.4% after nearly two years, down from below 2%.

This aligns with Checkonchain’s perspective that the cycle has entered a stress phase.

ETFs remain crucial as they function both as structural allocation mechanisms and as a short-term liquidity outlet.

According to Bitbo’s ETF tracker, U.S. spot Bitcoin ETFs collectively held about 1,311,862 BTC (approximately $117.3 billion) as of December 15.

BlackRock’s IBIT held around 778,052 BTC (approximately $69.6 billion) after experiencing mixed flows over the past two weeks, culminating in a modest $100 million net inflow.

This serves as a reminder that ETF demand can shift rapidly during risk-off periods.

Mining economics introduce another pressure point as reduced revenue can lead to inventory sales or postponed investments.

In its November review, Luxor’s Hashrate Index reported that the USD hashprice averaged about $39.82, down 17.9% month over month.

It reached an all-time low near $35.06 on November 22.

Bitcoin hashprice index (Source: Luxor)

Luxor noted that forward curves for December 2025 through April 2026 decreased by about 16–18% in USD terms.

Checkonchain also mentioned that miners are reducing their hashrate.

This raises concerns about whether the sector is nearing a capitulation-style flush or a prolonged margin-compression phase.

The third group, Bitcoin-treasury equities, is simultaneously facing a funding challenge.

Reuters reported that Bitcoin treasury companies acquired about $50 billion of Bitcoin over the past year, but many are now trading at a discount to their net asset value.

This diminishes the benefit of issuing equity to purchase additional Bitcoin.

When those shares are valued below the worth of the underlying assets, the “issue equity, buy BTC” mechanism becomes more difficult to sustain at scale.

Macro linkage has intensified the impact

Reuters cited LSEG data indicating Bitcoin’s average correlation to the S&P 500 at approximately 0.5 in 2025 compared to about 0.29 in 2024.

It also noted a correlation with the Nasdaq 100 near 0.52, versus about 0.23, linking many downturns to equity risk environments rather than solely crypto-related triggers.

Bitcoin price swings (Source: LSEG/Reuters)

Interest rates are significant in this context as they influence risk appetite. Bank of America anticipates two additional cuts in June and July 2026.

This keeps the 2026 rate trajectory at the forefront of discussions regarding risk assets.

Collectively, this causal framework is why Checkonchain describes the current environment as the most negative since 2022.

Underwater capital is concentrated in groups with balance sheets sensitive to price; the reflexive buyer base has reduced funding flexibility; miner margins are compressed into early 2026; and Bitcoin’s connection to risk assets is tighter than it was last year.

For readers seeking to interpret this into a forward-looking perspective without transforming it into trading advice, the stress can be monitored through quantifiable indicators.

Level (approx.)	What it represents
$81k–$82k	True Market Mean and ETF inflow cost-basis cluster
$95k	0.75 cost-basis quantile (reclaim marker)
$102.7k	Short-term holder cost basis
$75k	Lower bound in Bitwise support channel (MSTR cost basis reference)
$65k–$70k	Heavier ETF capital concentration

On-chain, the initial step is to assess whether realized-loss metrics decline from current levels as price ceases to establish new lows near the True Market Mean.

In terms of flows, the inquiry is whether significant outflow days remain common or transition to more stable net behavior.

In mining, the focal point is whether hashprice and the forward curve stabilize into early 2026, or if margin pressures intensify and compel further operational cutbacks.

The next balance-sheet evaluation remains the $80,000–$82,000 cost-basis range.

The post Bitcoin ETFs are 60% underwater, creating a $100 billion distressed house of cards appeared first on CryptoSlate.