Bitcoin’s ETF Problem: Why Wall Street’s ‘Safe’ Investment Made Crypto More Dangerous
Bitcoin fell below $100,000 this week, and for the first time in crypto history, there was nobody there to catch it. Not because investors lost faith in digital assets, but because the very products designed to make Bitcoin safer, spot ETFs, created a ticking time bomb. Nearly every ETF buyer entered at the same price, around $89,600. When Bitcoin approached that number, millions of investors realized simultaneously they were about to lose money. Meanwhile, the retail traders who used to buy every dip? They’ve disappeared, migrated into those same ETFs. The result was a 20% crash that reveals the truth about Bitcoin’s evolution into a mainstream asset.
When the SEC approved spot Bitcoin ETFs in early 2024, it was supposed to be a watershed moment. Finally, everyday investors could buy Bitcoin through their regular brokerage accounts. No confusing crypto wallets, no sketchy exchanges, just a simple ticker symbol like any other stock.
BlackRock’s IBIT Bitcoin ETF became the fastest-growing fund in history, pulling in $85 billion in assets. Fidelity, ARK Invest, and others followed suit. The message was clear: Bitcoin had gone mainstream, and it would be safer for it.
Except it wasn’t. And this week, we learned why.
The Price Everyone Paid
Here’s the problem that almost nobody saw coming: When millions of investors buy Bitcoin (CRYPTO: BTC) through ETFs, they don’t spread their purchases across different price levels like traditional crypto buyers did over the years. Instead, they cluster around a single average entry price.
For Bitcoin ETF investors, that magic number is $89,613.
Think about what that means. If you bought Bitcoin directly in 2020, you might have paid $10,000. In 2021, maybe $40,000. In 2023, perhaps $30,000. These scattered entry points created natural “support levels,” places where earlier buyers would step in to buy more, knowing they were still way ahead.
But ETF investors? They nearly all bought between $70,000 and $95,000 during the 2024-2025 rally. When Bitcoin approached that $89,613 average cost basis this week, something unprecedented happened: millions of investors simultaneously realized they were about to go underwater on their investment.
And they panicked together.
The Four-Day Bleed
The numbers tell …
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