Bitcoin ETFs Hold Firm Despite 40% Drop in BTC
Bitcoin has fallen more than 40% from its October highs, yet spot Bitcoin ETFs have proven remarkably resilient, with just 6.6% of assets withdrawn during the selloff.
Bloomberg Intelligence Senior ETF Analyst Eric Balchunas highlighted the difference between ETF investors and crypto-native holders. Many ETF buyers treat bitcoin as a small “hot sauce” allocation of 1%–2% alongside stocks and bonds. Their broader portfolios, supported by strong equity markets, help cushion the blow of crypto losses. “For now, the ETF boomers have really come through,” Balchunas said.
By contrast, concentrated bitcoin holders and leveraged traders often experience heavier selling pressure and what Balchunas calls “existential crisis mode.” Bitcoin has historically recovered from seven or eight similar drawdowns, he noted.
Balchunas also drew parallels to gold ETFs. About a decade ago, gold ETFs fell roughly 40% over six months, losing about one-third of assets before rebounding to $160 billion. Bitcoin ETFs, which briefly rivaled gold in size before this selloff, demonstrate that flows can reverse over time.
Looking ahead, volatility is expected to continue, but ETFs may help anchor bitcoin in mainstream finance. “A selloff doesn’t mean the end,” Balchunas said. “It just means it’s a selloff.”
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