Bitcoin is down more than 40% from its October highs, but investors in spot Bitcoin ETFs have pulled 6.6% of assets.
Feb 5, 2026, 11:39 p.m.
Latest developments: ETF investors are proving more resilient than many expected during bitcoin’s latest drawdown. In an interview on CoinDesk’s Markets Outlook, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas highlighted several key data points demonstrating this stability:
- Bitcoin has fallen more than 40% from recent highs, a move that historically rattles retail-heavy crypto markets.
- Over the same period, only 6.6% of Bitcoin ETF assets have exited.
- “For now, the ETF boomers have really come through,” he said.
Why ETF holders are holding: Balchunas argues ETF investors are structurally different from crypto-native traders.
- Many ETF buyers treat bitcoin as a 1%–2% “hot sauce” allocation alongside stocks and bonds, rather than a core holding.
- Their broader portfolios have benefited from strong equity markets, cushioning the psychological blow of crypto losses.
- ETF investors “tend to hold really strong,” Balchunas said, having lived through multiple market cycles in traditional assets.
The contrast with crypto natives: The same price drop can feel radically different depending on exposure.
- Investors heavily concentrated in bitcoin face what Balchunas described as “existential crisis mode.”
- Leveraged traders and long-time holders may be driving more of the selling pressure than ETF investors.
- “Volatility is the cost of the returns,” Balchunas said, noting bitcoin has endured seven or eight similar drawdowns historically.
Lessons from gold ETFs: Balchunas sees parallels between bitcoin and gold as ETF-wrapped assets.
- Gold ETFs suffered a roughly 40% drop over six months about a decade ago, during which about one-third of assets left.
- Despite that, gold ETFs later rebuilt assets and now hold roughly $160 billion.
- Bitcoin ETFs briefly rivaled gold ETFs in size before the recent selloff, highlighting how flows can reverse over time.
What comes next: Volatility is likely to persist, but ETFs may anchor bitcoin’s place in traditional finance.
- Balchunas said bitcoin’s 17-year history shows repeated recoveries to new highs after major downturns.
- ETF structures mean Bitcoin now sits alongside stocks, bonds and commodities in mainstream portfolios.
- “A selloff doesn’t mean the end,” he said. “It just means it’s a selloff.”
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