Bitcoin Blues: 26% of Supply Now Underwater as Prices Tumble

26% of Bitcoin Now Underwater as Market Turns, Down From Near-Zero Losses in December

  • 26% of Bitcoin supply is now “underwater,” meaning it’s worth less than its purchase price.
  • This represents a dramatic shift from December 2024 when just 0.015% of Bitcoin holdings were at a loss.
  • Despite current losses, Bitcoin investors are still in better shape than during the FTX collapse in November 2022, when 56% of investors were in the red.

More than a quarter of all Bitcoin is now trading below its purchase price, revealing a significant reversal for cryptocurrency investors. According to data from market analysis tool CryptoQuant, approximately 26% of the Bitcoin supply is currently “underwater,” meaning investors would lose money if they sold at current prices.

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This marks a stark contrast from late 2024, when virtually all Bitcoin holdings showed profits. On December 15, a mere 0.015% of Bitcoin supply was underwater, and as recently as January 18, only 1.46% of holdings were at a loss. Since then, the percentage of Bitcoin held at a loss has steadily increased as macroeconomic concerns have impacted cryptocurrency prices.

Bitcoin is currently trading at $76,880.56 after falling 3.7% in the past 24 hours. Meanwhile, Ethereum has dropped 8.1% during the same period, according to CoinGecko data. These declines coincide with President Donald Trump‘s tariffs on Chinese goods, which took effect Tuesday at midnight.

The last comparable underwater percentage occurred on September 6 last year, when nearly 30% of Bitcoin supply was in the red. Despite Bitcoin trading significantly higher now than last September’s $56,000, the proportion of underwater holdings remains similar. This suggests many investors purchased Bitcoin at peak prices during the late 2024 bull run following Trump’s election.

Institutional Investors Pulling Back

The data shows institutional investors appear hesitant at current price levels. Bitcoin ETFs saw outflows of $326.3 million yesterday, marking the seventh negative flow day out of the last eight, according to data from Farside Investors.

While underwater Bitcoin holdings generally correlate with price movements, they also reflect when investors entered the market and what prices they paid. The current situation highlights how many recent buyers entered at historically high prices during the 2024-2025 bull run.

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Historical Perspective on Investor Losses

Despite current concerns, Bitcoin investors are still faring relatively well compared to previous market downturns. During November 2022, amid the collapse of cryptocurrency exchange FTX, more than 56% of Bitcoin investors were underwater—more than double the current percentage.

This context suggests that while recent market volatility has negatively impacted many Bitcoin holders, the market hasn’t reached the extreme distress levels seen during previous crypto winter periods. However, the sharp increase from near-zero losses just months ago underscores the continued volatility in cryptocurrency markets.

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