The Damage Report: What the Bitcoin bear market cost me

The Bitcoin and Ethereum bear market has hit my portfolio hard. Five positions. Nearly $10,000 in combined losses when you factor in current valuations against what I paid. And distributions that have dropped nearly 30% from April to June.

I'm still holding all five. Here's why — and here's what the numbers actually show.

Before I explain my thinking, you deserve the full picture. This is what a real portfolio looks like during a crypto bear market.

[Distribution comparison table — April vs June 2026]

A few things worth noting before you draw conclusions from these numbers:

YBTC and YETH received five weekly distributions in April but only four in June. MSTY and MSTW received four in April and five in June. The number of payouts in a given month affects the total significantly — so the drop looks worse for some ETFs than it actually is on a per-distribution basis.

Even accounting for that, the income reduction is real. YETH is down 44% and MSTY is down 39% compared to April. That is not a rounding error. That is a bear market doing what bear markets do.

The story begins with Bitcoin. After a strong run in early 2026, Bitcoin entered a significant correction pulling Ethereum down with it. For most crypto investors that means watching prices fall and waiting. For holders of crypto income ETFs the pain is doubled — you feel the price decline in your NAV and you watch your distributions shrink at the same time.

Here is why distributions shrink in a down market. These ETFs generate income by selling covered calls against their underlying holdings. When volatility is high, call premiums are rich and distributions are generous. When the market falls and volatility compresses, those premiums shrink — and so does your monthly income. You are essentially getting paid less to wait out a recovery.

MicroStrategy amplified everything. MSTY and MSTW are both built on MSTR, which holds Bitcoin on its balance sheet with leverage. When Bitcoin drops, MSTR drops harder. When MSTR drops harder, the covered call premiums on MSTR compress further. It is a volatility spiral that punishes income investors more than straight Bitcoin holders.

YETH had the roughest ride of the five. Ethereum has underperformed Bitcoin during this correction, and the combination of price decline, compressed premiums, and one fewer distribution month in June pushed YETH's income down 44% from April.

BTCI is the most stable of my five crypto income positions, and the numbers show it. A 5.7% drop in distribution during a Bitcoin bear market is relatively modest. The monthly distribution structure smooths out the volatility that weekly payers experience when a month has four payouts instead of five.

BTCI holds Bitcoin and sells covered calls against it on a monthly basis. The longer time horizon on the options means premiums are less sensitive to short-term volatility spikes and drops. That stability comes at a cost — BTCI typically yields less than its weekly paying counterparts during bull markets. But in a bear market like this one, that conservative structure is exactly what you want.

My total P&L on BTCI including distributions received is -$1,822. The smallest loss of my five crypto positions. Holding.

YBTC's 38% distribution drop looks alarming until you account for the payout structure. April had five weekly distributions, and June has four. That single extra payout in April inflates the April number and makes the June comparison look worse than it is on a per-distribution basis.

That said, the underlying distribution per payout has still declined meaningfully. Weekly covered call ETFs sell short-dated options — typically one week out. Short-dated options are extremely sensitive to implied volatility. When Bitcoin volatility compresses during a bear market, weekly call premiums drop sharply, and your income follows immediately. There is no buffer, no smoothing. You feel every move in real time.

My total P&L including distributions, is -$1,711. Holding.

I am not holding these positions because I am frozen or because I can't take a loss. I am holding them because I have a thesis and the thesis has not broken.

I believe Bitcoin is bottoming. No one knows where the exact bottom is — anyone who tells you otherwise is either lying or delusional. But bottoms have characteristics, and the current market is showing several of them. Selling pressure is exhausted. Institutional demand has not disappeared. And the macro environment is shifting in ways that historically favor risk assets like Bitcoin.

The covered call structure is also still working. Even at June's reduced levels, my five crypto positions collectively produced $650.77 in distributions. A straight Bitcoin holder received nothing during the same period.

The full argument — including my complete breakdown of MSTY, YETH, and MSTW, the three specific signals I'm watching for a Bitcoin turnaround, and my position sizing framework for crypto income ETFs — is available to Core and Premium subscribers below.