Investors who hold Bitcoin exchange-traded funds (ETFs) and are currently experiencing significant paper losses on their investments might ultimately decide to sell their holdings and exit the market. This decision could stem from a combination of frustration, the desire to cut their losses, and a lack of confidence in a potential recovery of Bitcoin's price in the near future. As fear and uncertainty grip the market, these investors may feel that there are better opportunities elsewhere, prompting them to give up on their Bitcoin investments and liquidate their positions.
source: https://www.coindesk.com/markets/2026/02/02/bitcoin-etf-holders-sitting-on-paper-losses-may-throw-in-the-towel