Bitcoin Heads for Fourth Annual Loss: What ETFs May Face in 2026

Core Insights - Bitcoin is experiencing its fourth consecutive yearly decline, currently down about 7% as of December 16, 2025, following a selloff that saw prices drop to $87,000 from a peak of $126,000 in October 2025 [1][8] - Despite stronger institutional adoption and regulatory support, Bitcoin's price remains volatile, with significant ETF outflows indicating investor skepticism [2][5] - The correlation between Bitcoin and tech stocks remains high, with a beta of 2.77 for the iShares Bitcoin Trust (IBIT), suggesting that Bitcoin is perceived as a risky asset [3][8] Market Dynamics - Over $5.2 billion has been withdrawn from U.S.-listed spot Bitcoin ETFs since October 10, signaling a lack of confidence among investors [5] - The ongoing AI boom and the energy demands of data centers may impact the availability of power for Bitcoin mining, raising sustainability concerns [6][7] Political and Economic Context - The upcoming mid-term elections in the U.S. may influence Bitcoin's market dynamics, as a decline in approval ratings for President Trump's economic policies could limit Bitcoin's rebound potential [8][9] - Bitcoin is often compared to gold, with a potential market capitalization of over $500,000 if it reaches a similar valuation, currently at approximately $11.5 trillion [10] Investment Vehicles - Investors are encouraged to consider various Bitcoin-focused ETFs, including IBIT, FBTC, GBTC, BTC, BITB, ARKB, and BITO, as potential investment options in the current market environment [12]