Bitcoin has fallen over 45% from its October 2025 peak, dragging spot crypto fund AUM down to $130 billion. Roughly 40% of spot Bitcoin ETF holders would need a 50% recovery just to break even. But according to Bitwise CIO Matt Hougan and GraniteShares CEO Will Rhind in a recent CNBC interview, the selling pressure is not coming from where most expect.
ETF Outflows Are Small Relative to AUM
Net outflows from Bitcoin ETFs stand at about $7 billion — a minor figure compared to total AUM. Most of the decline stems from price drops, not redemptions. Hougan described a split market within the same product: fast money trading the next month versus long-term allocators investing over 4–5 years. Hedge funds and short-term traders are creating outflows that mask steady buying from financial advisor channels.
Gold Surpasses $5,000, Piling Pressure on Crypto
Gold broke past $5,000 an ounce while Bitcoin tumbled. Rhind said, “It’s tough to be a Bitcoin investor right now… the precious metals thing has really caught crypto investors off guard. This is not supposed to happen.” Gold’s rally diverted safe-haven flows away from crypto, intensifying Bitcoin’s short-term pain.
This Bear Market Is Shallower Thanks to ETF Holders
Previous Bitcoin bear markets saw retracements of 77%–85%. This time the drawdown sits at around 50%–52%. Hougan credited ETF-based long-term holders with providing a price floor, limiting downside even if they haven’t prevented major losses. Outflows have also slowed to under $200 million daily despite heavy price pressure, a pattern that historically signals a potential turning point.
Wall Street Giants Open Doors, but a Sharp Recovery Is Unlikely
Morgan Stanley, Merrill Lynch, Wells Fargo, and UBS now allow crypto product exposure. Morgan Stanley has filed to launch its own spot Bitcoin ETF after training its roughly 15,000 financial advisors. Hougan expects a slow bottoming process: “Usually these bear markets die in exhaustion, not excitement. I would expect it to bottom out slowly, and then things like Morgan Stanley going all in on Bitcoin will accelerate us on the upside.”