Bitcoin breaches $71,000 as spot ETF investors nurse losses

Bitcoin tops $71,800 as Ethereum holds above $2,050 amid renewed demand for US spot ETFs.

On March 4 the price of the leading cryptocurrency rose above $71,800. The broader digital-asset market followed, including Ethereum, which held above $2,050.

The rally was underpinned by strong demand for US spot bitcoin ETFs. Over the past five days, these vehicles recorded $1.4bn of inflows.

The pitfalls of ETFs

Bitfinex analysts told CoinDesk that the earlier stagnation in bitcoin reflected the mechanics of exchange-traded funds. They said the market’s reaction is also being muted amid rising oil prices and geopolitical tensions.

New ETF shares are created by authorised participants—big banks and market makers. As demand rises they often sell investors shares they do not yet hold. Regulators allow such trades: participants may buy the underlying bitcoin to back the sold shares with a delay of several hours to a day.

As a result, inflows into funds show up instantly, while actual spot purchases are deferred. When market makers finally buy the “digital gold”, their trades are often offset by selling pressure. That keeps the price in a narrow range.

“The funds’ capitalisation is growing, but the price of bitcoin is standing still because there are no instantaneous spot trades. Because of this, the rate may appear artificially suppressed,” the experts said.

Bitfinex analysts added that in normal conditions such delays have little impact. But during periods of high volatility, the lag between ETF demand and real purchases can markedly distort the price of the leading cryptocurrency.

The biggest ETF drawdown

An analyst using the pseudonym Darkfost pointed to a record dollar drawdown facing investors in spot bitcoin ETFs.

📉 Bitcoin ETFs experienced largest Drawdown since launch

Holders of spot Bitcoin ETFs, which reflect the demand from their investors, are currently under pressure compared with the average realized price, estimated at around $79,000.

💡 This metric should be considered as an… pic.twitter.com/oWA0QHyDes

— Darkfost (@Darkfost_Coc) March 4, 2026

By his calculations, the average entry price for buyers of these funds is about $79,000. While the leading cryptocurrency trades below $70,000, investors are taking losses. He clarified that the metric is a guide, but it adequately reflects the market’s average purchase cost.

During the correction, outflows from the funds exceeded $8.9bn. The main hit fell on BlackRock’s IBIT. From its peak of 806,000 BTC, the fund shed more than 42,000 BTC, putting visible pressure on the asset’s price.

Darkfost noted that the situation is gradually stabilising. The total drawdown from all-time highs has narrowed to $7.8bn.

The broader picture

On March 3, net inflows into US spot bitcoin ETFs amounted to $225.15m.

Positive momentum has persisted for a second week. Combined inflows on March 2 and 3 reached $683.3m. Strong readings last week ended a prolonged period of outflows totalling almost $4bn.

Altcoin-based funds were mixed. Spot Ethereum ETFs lost $10.75m of capital.

Products based on XRP and Solana, by contrast, attracted $7.53m and $1.03m, respectively.

Overall market sentiment remains pessimistic despite a 9.5% rise in bitcoin over the past week. The Fear and Greed Index has fallen to 10.

Billionaire Ray Dalio once again criticised bitcoin on the All-In podcast. He pointed to a lack of privacy, potential quantum-computing risks and the market’s small size relative to gold.

Ray Dalio just warned against Bitcoin:

“No privacy.”
“Central banks won’t buy it.”
“Quantum risks.”
“Small, controlled market.”

Funny.

Those same critiques were made at $100. pic.twitter.com/hDCltK9rwH

— Simply Bitcoin (@SimplyBitcoin) March 3, 2026

Bitwise CIO Matt Hougan called Dalio’s arguments a long-term opportunity.

“For precisely these reasons, the size of bitcoin is only 4% of gold. If these problems did not exist, the coin’s price would already be about $750,000. I invest in the first cryptocurrency in part because I am sure that over time the situation will change,” Hougan wrote.

On March 3, Wintermute experts said that the crypto market remains fragile because of rising energy prices and structural shifts in the global economy.