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Or sign-in if you have an account.A roster of bitcoin exchange-traded funds trading in the United States has seen about US$5.5 billion in outflows over the past month, according to data, further pressuring the underlying price. Photo by SEBASTIEN BOZON/AFP via Getty ImageBitcoin’s latest retreat has been so severe, it has pushed more than half its circulating supply into loss-making territory.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorWith the coin trading around US$61,000 — down about 50 per cent from its record highs — and a fresh break below its 200-week moving average, it is quickly racking up losses for a growing share of its holders. For the first time since late 2022, more than 50 per cent of the coins trading are doing so below their purchase price, according to Vetle Lunde at K33 Research. The figure stood at just 30 per cent a month ago.It’s the latest sign of stress for a market that has been mired in a downdraft for months. Bitcoin and numerous other tokens have been selling off since October, with few positive developments able to arrest a decline that last week brought the largest token to its lowest since 2024 and wiped out all gains notched during the crypto-friendly Trump presidency.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againIts newest leg lower set off after bitcoin-treasury company Strategy Inc. announced a sale of a handful of tokens that sent anxiety swirling among traders, given the importance the company has held within the crypto ecosystem. Outflows from bitcoin-focused exchange-traded funds have accelerated, too, and volatility has spiked to a three-month high, K33 said.For bitcoin holders — long- and short-term ones — it has been painful.“Prices move because of structural positioning, leverage, emotional reactions and event-driven risk, but the bigger picture is a reflection of persistent market conditions,” said Ophelia Snyder, who was a co-founder of the asset-management firm 21Shares. “And until those underlying conditions change, I think we’re likely to continue seeing more of the same: range-bound markets, periodic volatility, leverage resets, and a lot of investors waiting for the next truly important catalyst.”The significance extends beyond paper losses. Bitcoin’s most powerful rallies have historically depended on attracting new buyers willing to pay higher prices than the previous wave of investors. When more than half of the supply is underwater, the market begins to carry the weight of millions of disappointed holders who bought into last year’s enthusiasm.That can become a headwind of its own. Investors sitting on steep losses often use rallies as opportunities to exit positions rather than add to them, creating a source of latent selling pressure. At the same time, a prolonged drawdown risks damaging one of bitcoin’s most valuable assets: its reputation as a trade that reliably rewards patience. Every month spent far below its highs is another month in which a new generation of investors associates crypto less with extraordinary gains and more with missed opportunities, especially as capital chases faster-moving stories elsewhere in markets, such as artificial intelligence chipmakers.“After 17 years, bitcoin still has no use case beyond pure speculation,” said JonesTrading chief market strategist Michael O’Rourke.A roster of bitcoin exchange-traded funds trading in the United States has seen about US$5.5 billion in outflows over the past month, according to data compiled by Bloomberg, further pressuring the underlying price. Meanwhile, total volumes across centralized exchanges last month slumped month-over-month to US$4 trillion, marking the second consecutive month for the figure to be at the lowest levels in nearly two years, according to a report from Cantor’s digital assets research team.Still, Lunde at K33 might have found a silver lining amid the bad-news deluge. Historically, half of Bitcoin trading “underwater” has only been seen near major bear-market bottoms “as selling pressure from profitable holders becomes increasingly exhausted.” In the past, the coin has tended to bottom within weeks of crossing that level, though it has also been known to suffer through an additional “final leg lower,” Lunde wrote in a note.“While not a guarantee, the setup suggests downside may be limited relative to the potential upside over the coming year, strengthening the case for a contrarian bullish bias,” he said.—With assistance from Olga Kharif and Emily Nicolle. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.