BlackRock's Bitcoin ETF Is $13 Billion Underwater

BlackRock's iBit is the worst-performing Bitcoin ETF by cumulative profit and loss, sitting approximately 13 billion dollars underwater as of the episode date. The average cost basis for iBit holders is roughly 79,500 dollars against a Bitcoin price of around 62,000 dollars at recording, implying a significant unrealized loss across the fund's net flows. At its peak, iBit had accumulated approximately 30 billion dollars in cumulative profit. The poor outcome is attributed to most iBit shareholders failing to take profits near the all-time high and a large share of inflows arriving at elevated prices, pushing the average cost basis higher.

Fidelity's FBTC is in a comparatively better position. Shareholders took meaningful profits during December 2024, which reduced the average cost basis of current holdings to approximately 55,000 to 55,350 dollars. FBTC is roughly 1.5 billion dollars in the red, down from a peak cumulative profit of approximately 14 billion dollars. BitB is also underwater, while the remaining Bitcoin ETFs are roughly breaking even. The analyst noted that these cost basis figures carry some imprecision because the exact price at which each ETF acquired Bitcoin is not known, only the approximate price on the day net flows occurred.

Every spot ETH ETF is underwater on its flows since launch. BlackRock's ETH ETF is the most deeply affected, sitting approximately 6.4 billion dollars underwater with an average cost basis of roughly 3,900 dollars per ETH against a current price of approximately 1,600 dollars, representing close to a 60 percent loss on net flows. The next closest ETH ETF is approximately 18 percent down, believed to be Fidelity's FETH. Most of BlackRock's ETH ETF inflows arrived while ETH was rallying hard alongside Bitcoin in mid-2025, and insufficient profit taking occurred near the peak. The caveat was raised that individual shareholders within the fund may still be ahead even though the fund as a whole is deeply underwater.

ETF holders and digital asset treasury companies like Strategy now play as significant or more significant a role in market dynamics as miners and validators did in prior cycles. If Bitcoin falls further and ETF holders do not capitulate, nearly every Bitcoin ETF could move into negative cumulative flow territory. Underwater shareholders may face growing psychological pressure to cut losses in the coming months, which could accelerate outflows and have a significant negative impact on market sentiment.

SpaceX is conducting its IPO at a fixed price of 135 dollars per share rather than using a traditional price range and demand-based pricing method, and is pushing to allocate 20 to 35 percent of shares to retail investors compared to the typical 5 to 10 percent. At the time of recording, SpaceX pre-IPO shares on Hyperliquid were trading at approximately 138 dollars. The argument was made that the unusually high direct retail allocation reduces the incentive for retail investors to seek price exposure through crypto rails, which may explain why these markets have not yet demonstrated their full potential.

The pre-IPO crypto market on the platform remains small. The SpaceX pre-IPO token has a market cap of approximately 6 million dollars and 11,000 holders, up from 6,600 holders around May 10, roughly doubling in about one month. Total market cap across all pre-stocks on the platform is 22 million dollars, with Anthropic accounting for approximately 38 percent, SpaceX 28 percent, and OpenAI 12 percent. These instruments are cash-settled and do not confer actual stock ownership. The current state of the market was characterized as a proof of concept rather than a mature product, with approximately 50,000 holders cited as a benchmark for a truly healthy and liquid pre-IPO market. If Anthropic skews its eventual IPO toward institutional allocations rather than retail, its pre-IPO crypto market could see stronger relative participation than SpaceX did.