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Bitcoin’s plunge below $100,000 this week was more than another crypto crash. It revealed a basic flaw in how Wall Street packaged digital assets for Main Street investors.
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 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 the story. Between October 29 and November 3, Bitcoin ETFs hemorrhaged $1.34 billion. On November 3 alone, BlackRock’s IBIT saw $186.5 million walk out the door. That represented 100% of all ETF outflows that day.
This wasn’t retail investors clicking "sell" on their Robinhood apps. This was institutional money heading for the exits.
Here’s where ETFs become dangerous in a way that traditional Bitcoin ownership never was: When you own actual Bitcoin, there’s friction to selling. You need to log into an exchange, verify your identity, transfer coins, and think about tax implications. It takes time, and time allows panic to subside.
ETF shares? One click. Same as selling a stock. No friction, no cooling-off period, no second thoughts.
Wall Street calls this "liquidity." But liquidity cuts both ways. Great when everyone wants in. Catastrophic when everyone wants out simultaneously.
Where Did the Safety Net Go?
The second part of this story is quieter but equally important: Traditional retail crypto buyers have largely disappeared.
Data from major exchanges shows that small "retail" deposits to platforms like Binance have collapsed by 83%. From 552 Bitcoin per day in early 2023 to just 92 Bitcoin per day in October 2025. These weren’t people leaving crypto entirely. Many of them simply migrated to, you guessed it, ETFs.
For years, retail crypto investors played a key role during market corrections. When Bitcoin dropped 10-20%, they’d rush in to "buy the dip." It became part of crypto culture, a contrarian behavior that actually stabilized markets during rough patches.
But ETF investors don’t have that culture. They’re trained by decades of stock market experience to cut losses quickly, set stop-losses at round numbers like $100,000, and follow the herd. When Bitcoin broke below $100,000 this week, it triggered a cascade of automated sell orders. Something that simply didn’t exist in crypto-native markets.
The result? There was no safety net. No wave of bargain hunters stepping in at $95,000, then $90,000. Just air.
Bitcoin’s ETF cost basis ($89,613) vs. current price ($100K) and peak ($126K), alongside the 83% collapse in retail Binance deposits (552 to 92 BTC/day), shows concentrated risk and disappearing retail support.
The False Stability
The cruel irony is that ETFs were supposed to reduce Bitcoin’s notorious volatility. The theory was simple: Institutional investors with long time horizons would smooth out the wild swings driven by emotional retail traders.
But institutions aren’t buying and holding Bitcoin for the long term. They’re momentum traders. They’re algorithms that automatically rebalance portfolios. They’re risk-parity funds that cut exposure when volatility spikes.
In other words, they amplify trends. When Bitcoin was rising in 2024, institutional ETF flows accelerated the rally. When it started falling this week, those same flows accelerated the decline.
Traditional retail crypto investors, for all their reputation as emotional traders, actually exhibited more "diamond hands" than institutions ever did. They rode out 50% crashes. They bought when everyone else was fearful. They treated Bitcoin as a long-term bet, not a quarterly position.
ETF investors? Four days of losses and $1.34 billion fled.
What This Means For You
If you own Bitcoin through an ETF, this doesn’t mean you should panic. But you should understand what you actually own.
You’re not holding an emerging technology with a grassroots community of believers. You’re holding a financial product that behaves like other financial products. It rises on momentum, falls on fear, and amplifies whatever the crowd is doing.
That doesn’t make ETFs bad. But it does make them different from what many investors expected when they bought that "safe" way to own Bitcoin.
The deeper question is whether Bitcoin can survive being institutionalized. The asset was designed to be decentralized. Owned directly by individuals around the world, resistant to coordinated behavior, resilient through its distribution.
Wrapping it in centralized products that concentrate ownership, synchronize behavior, and remove friction hasn’t made it safer. Maybe it made it more fragile.
This week, we saw what happens when millions of investors with identical cost bases and zero-friction selling meet a 10% decline. The answer: They create a 20% decline.
As Bitcoin searches for a bottom, investors need to ask themselves a hard question: Did Wall Street improve Bitcoin by making it accessible, or did it import the very problems that Bitcoin was supposed to escape? Herd behavior, algorithmic panic, momentum addiction.
The November 2025 crash suggests the answer might not be what anyone wanted to hear. Sometimes the cure becomes the disease.