In the wake of recent Bitcoin losses and volatility, more than a quarter—26%—of the Bitcoin supply is now “underwater,” meaning it is worth less than what it was purchased for.
Data collected by the market-analysis tool CryptoQuant shows that investors have seen a drastic change in fortunes over recent months. In December 2015, only a tiny fraction of BTC (0.01%) was “underwater.” This means that investors only had a marginal amount of BTC without a realized gain. Just 1.46% of Bitcoin was held in a negative position as recently as 18 January.
According to CryptoQuant, the percentage of crypto assets has slowly increased since January 18, when macroeconomic worries have affected their prices. The Bitcoin price is currently sitting at $76,880.56 after having fallen 3.7% in the past 24 hours, while Ethereum is down 8.1% over the last 24 hours according to CoinGecko data, as U.S. President Donald Trump’s tariffs on Chinese goods came into play on Tuesday at midnight.
Last time a large portion of Bitcoin was “underwater” was on September 6, last year. The number was just under 30%. Bitcoin, which is currently trading at a higher price than when it did on September 6, at around $56,000 per coin, has remained roughly the same.
It could also be due to the fact that BTC prices were at historic highs in the late 2024/early 2025 period, during the bull market triggered by the presidential election of Donald Trump.
Although the “underwater” number has appeared to be correlated with BTC’s price in the past couple of years, the indicator also indicates when traders or investors entered the market as well as the price they paid.
Farside Investors’ data indicates that institutions aren’t exactly rushing in to purchase Bitcoin ETFs, with flows being negative on seven days out of eight.
The worst is yet to come for investors
Although a large portion of BTC holders are in the negative compared to a few short months ago, their performance is still comparatively good compared to the darkest days of the cryptocurrency world.
Around the time that FTX collapsed in November 2022, 56% of BTC holders were losing money.
Stacy Elliott edited this article.
