The Federal Reserve is now facing a whopping $1.06 trillion in unrealized losses on its balance sheet.

The New York Federal Reserve Bank, which handles the Fed’s bond transactions, just disclosed the losses, linking them to the central bank’s tight monetary stance.

The Fed’s bonds are losing value as the bank maintains higher-for-longer interest rates in a push to fight inflation.

The agency says it will ensure the losses won’t hit its bottom line or cash transfers to the Treasury.

“The unrealized gain or loss position of the SOMA portfolio has no effect on net income or Federal Reserve remittances to the Treasury unless assets are sold and gains or losses are realized.

Unrealized gains and losses have no effect on the conduct of monetary policy.”

The New York Fed also notes the unrealized losses, which are recorded through the end of 2024, were offset slightly as the central bank let bonds mature without reinvesting.

The Fed’s bond portfolio began witnessing significant unrealized losses over the previous two years, clocking $1.08 trillion in 2022 and $948.4 billion in 2023.

The account witnessed unrealized gains of $354 billion in 2020 and $127.9 billion in 2021.

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US banks are now saddled with $413.2 billion in unrealized losses on their balance sheets.

In its new Quarterly Banking Profile for the first quarter of 2025, the Federal Deposit Insurance Corporation (FDIC) says US banks reported a $67.5 billion decrease in unrealized losses on securities, primarily Treasuries and other bonds.

Although it looks like progress, the FDIC warns the decrease has likely already reversed amid extreme bond market volatility and a surging Treasury yield curve.

“Longer-term interest rates such as the 30-year mortgage rate and the 10-year Treasury rate decreased in the first quarter, increasing the value of securities reported by banks and lowering unrealized losses.

However, increases in longer-term interest rates since the end of the first quarter would likely reverse most of these improvements in unrealized losses if measured today.”

Rebel Cole, who worked in the Federal Reserve System for ten years, tells Fortune that today’s levels of unrealized losses represent a serious ongoing danger for lenders.

“All it takes is one bad news story about any of these banks, and we could have another banking crisis like we had in March of [2023].

I’m amazed we haven’t had one since then.”

Unrealized losses represent the difference between the price banks paid for securities and the current market value of those assets.

Concern over such paper losses played a major role in the collapse of Silicon Valley Bank in 2023, as depositors panicked and withdrew funds after learning the bank sold securities at a steep loss to cover liquidity needs.

The FDIC says banks recorded a $180.9 billion rise in domestic deposits in Q1, which is about 1%, and a $3.8 billion increase in net income to $70.6 billion, with a reserve coverage ratio declining from 179.9% to 168.8%.

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This followed Bitcoin’s drop to $76,000 amid a sharp and aggressive retracement from the mid-$80,000 range it traded in for the past several weeks.

NUPL and NUL are valuable tools for assessing the behavioral state of Bitcoin holders. These metrics are derived from the difference between Bitcoin’s current market price and the realized price — the average price at which all coins were last moved on-chain.

NUPL = (Market Cap – Realized Cap) / Market Cap
NUL = (Realized Cap – Market Cap) / Market Cap

NUPL shows the ratio of unrealized profits in the network. A high NUPL suggests that most coins are profitable, while a low or negative NUPL indicates widespread losses. NUL, its inverse, measures unrealized losses.

A high NUL suggests that many coins are held below their acquisition cost, which is typically associated with capitulation or fear. Together, these indicators help identify market cycles, sentiment transitions, and inflection points that precede major moves.

A NUL of 0.0578 meant that 5.78% of Bitcoin’s market cap was in an unrealized loss. This implies that a considerable cohort of market participants, mostly those who entered near Bitcoin’s March peak, found themselves holding BTC at a loss. This is a meaningful psychological shift, as it signals the onset of fear among short-term holders and the sharp cooling of the bullish sentiment we’ve seen at the beginning of the year.

To put this in context, the lowest NUL reading before 2025 occurred on Dec. 15, 2024, when it reached 0.0. That day, Bitcoin was trading above $104,000, and nearly all holders were in profit. Around the same time, NUPL peaked at 0.6349, a level historically associated with euphoric sentiment and overheated market conditions. These readings were consistent with a mature bull phase, often followed by distribution and increased volatility.

The transition from those extreme highs to the current mid-range suggests a market undergoing correction rather than collapse. NUPL remains above 0.4, indicating that most investors are still in profit. However, a rising NUL implies that losses are growing among recent entrants, particularly those who bought into strength late in the cycle.

First, April’s elevated NUL and declining NUPL reveal that the market has shifted from a risk-on to a highly reactive, cautious sentiment. Profit margins have compressed, and a growing share of coins have slipped into loss. This shows that short-term holders are under immense pressure, and the market recalibrates after a rally.

Second, the relatively modest rise in NUL, still well below 0.1, indicates that this is not a widespread capitulation event. Historically, NUL levels above 0.1 have been associated with deep bear markets and network-wide stress. The current 0.0578 level points to a correction with localized losses, likely centered around recent buyers.

Third, NUPL’s resilience above 0.4 supports the thesis that long-term holders remain largely in profit and unshaken. These holders typically serve as a stabilizing force during volatility, and their conviction often sets the foundation for new accumulation zones.

Fourth, Bitcoin’s price action shows that while the price dropped significantly from its peak, it remained in a historically elevated range above $76,000 and up to $85,000 in April. This further supports the view that the drawdown was technical rather than structural, with little evidence of panic selling or systemic deleveraging.

The NUPL and NUL data clearly show a market in transition. The recovery in both ratios as of April 10 shows that the broader market structure remains intact, with most holders still in profit.

This setup resembles historical phases in which the market consolidates before setting the stage for a new upswing, provided macro conditions remain favorable.

The post Unrealized losses hit highest level since October 2023 as Bitcoin dropped to $76k appeared first on CryptoSlate.

The stablecoin issuer Tether is reportedly sitting on $3.86 billion worth of unrealized Bitcoin (BTC) profits.

The crypto tracker Spot On Chain notes Tether has the sixth-largest Bitcoin wallet in the world, with its reserves totaling 92,647 BTC worth $7.88 billion at time of writing.

Tether owns 100,521 BTC in total, meaning the firm holds nearly 8,000 BTC outside its reserves wallet, according to the crypto data platform Arkham.

The stablecoin issuer announced in May 2023 that it would regularly allocate up to 15% of its net realized operating profits toward buying Bitcoin, and it purchased 8,888 BTC worth $735 million in the first quarter of 2025.

Tether chief executive Paolo Ardoino said in 2023 that Bitcoin had emerged as a store of value and “continually proven its resilience.”

“Our investment in Bitcoin is not only a way to enhance the performance of our portfolio, but it is also a method of aligning ourselves with a transformative technology that has the potential to reshape the way we conduct business and live our lives.”

Tether issues USDT, the largest stablecoin by market cap.

BTC is trading at $85,111 at time of writing. The top-ranked crypto asset by market cap is up more than 3% in the past 24 hours but down nearly 3% in the past week.

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Tether, the issuer of the world’s largest stablecoin USDT, acquired 8,888 Bitcoin in the first quarter of 2025.

According to crypto analytics firm SpotOnChain, the purchase is worth approximately $735 million and raises Tether’s total Bitcoin holdings to 92,647 BTC, valued at around $7.64 billion.

The firm’s Bitcoin holdings now place it among the top six largest BTC wallets, and according to SpotOnChain, its estimated unrealized profit is $3.86 billion.

Tether has maintained a consistent Bitcoin acquisition strategy since May 2023, when it committed to allocating 15% of its quarterly profits to the top digital asset.

These purchases are typically made throughout the quarter and settled at the end. Onchain data reveals the firm has acquired the same amount, 8,888 BTC, each quarter since that announcement.

This strategy is part of a broader effort to diversify its reserves, which include gold, cash equivalents, and other short-term assets.

Tether’s expansion

Beyond growing its crypto reserves, Tether is also actively expanding into other industries.

On March 31, Tether CEO Paolo Ardoino revealed that the company is scaling its operations in artificial intelligence, telecommunications, and data infrastructure. According to him, the firm is currently hiring across these sectors.

Ardoino stressed that Tether aims to challenge legacy Web2 companies by building decentralized consumer-facing products powered by peer-to-peer technologies.

He stated:

“Tether’s portfolio of upcoming projects and products is gonna disrupt many legacy Web2 businesses. We focus on real world consumer apps decentralization through peer-to-peer technology.”

Last month, Tether acquired nearly 50 million shares in Adecoagro, a Latin American agribusiness, increasing its ownership to 70%. The firm operates in Argentina, Brazil, and Uruguay and focuses on sustainable agriculture and food production.

In addition, Tether secured a 30.4% stake in Italian media company Be Water through a €10 million investment involving both capital infusion and equity purchase.

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Bitcoin continues to face massive selling pressure, with its price dropping below the $84,000 mark, marking a 15% decline since the start of March. This downturn has fueled panic selling and rising fear, with many investors now speculating whether Bitcoin is entering a bear market. The recent decline has left the market in a state of uncertainty as BTC struggles to reclaim key levels that could restore bullish momentum.

According to on-chain data from CryptoQuant, the percentage of Bitcoin supply in profit has dropped from 99% to 76%, meaning that 23% of the total BTC supply is now in an unrealized loss. Historically, such large declines in supply profitability have led to heightened volatility as weaker hands capitulate while long-term holders assess market conditions.

With Bitcoin at a critical juncture, traders are closely watching whether BTC can reclaim key resistance levels or if further downside pressure will push prices even lower. The coming days will determine whether Bitcoin is set for a recovery or deeper losses ahead.

Bitcoin Faces A Critical Test

Bitcoin is struggling to reclaim higher prices, with weak price action and intense fear continuing to dominate sentiment. Many analysts are now calling for the end of this bull cycle, as BTC lost the $90,000 level weeks ago, failing to regain its previous momentum. Currently, Bitcoin is stuck below $85,000, barely holding above $80,000, as bearish pressure keeps investors on edge. The market remains in a vulnerable position, with many expecting a further drop into lower demand levels.

However, there is still hope for a recovery, as BTC could reclaim key levels and reignite buying interest. Top analyst Axel Adler shared insights on X, revealing that the percentage of Bitcoin supply in profit has dropped from 99% to 76%, meaning that 23% of the total BTC supply is currently in an unrealized loss. This equates to approximately 4,561,966 BTC out of 19,834,633 BTC in circulation, marking a significant shift in market profitability.

Adler further noted that such a decline could trigger panic among inexperienced investors, potentially fueling more selling pressure. However, he pointed out that a similar trend occurred during the previous consolidation phase, when the percentage of supply in profit dropped to 70%, confirming macro market cycles that often precede strong recoveries.

For now, Bitcoin remains in a delicate position, with the next few trading sessions set to determine whether BTC can reclaim higher resistance levels or if bears will extend the current downtrend. Investors are closely watching whether this cycle mirrors past consolidations or if deeper losses are ahead.

BTC Price Action: Technical Details

Bitcoin (BTC) is currently trading at $82,400, struggling to gain momentum after multiple failed attempts to break above the 200-day Moving Average (MA) at $83,300. This level has acted as a strong resistance, preventing BTC from establishing a clear recovery trend.

For bulls to regain control, BTC must reclaim the 200-day MA and push above the 200-day Exponential Moving Average (EMA) at $85,700. A break and hold above these levels would indicate a shift in sentiment, creating a healthier setting for a potential recovery rally. Without this push, Bitcoin remains trapped in a bearish phase, increasing the risk of further declines.

If BTC fails to reclaim these key technical levels, the selling pressure could intensify, leading to a drop toward lower demand zones below $78,000. This would confirm a continuation of the current downtrend, forcing Bitcoin into deeper correction territory. With BTC at a critical inflection point, traders are closely watching whether bulls can step in or if bears will drive prices even lower.

Featured image from Dall-E, chart from TradingView

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