Crypto ETFs Tumble Amid Bitcoin Rout

November 09, 2022

Cryptocurrency-related exchange-traded funds plunged Wednesday as the collapse of a deal to sell the FTX.com exchange battered prices of the largest digital currencies.    

Bitcoin lost 15%, ethereum dropped 16% and Ripple plummeted 18% Wednesday, pushing down crypto-focused ETFs. The world's biggest crypto fund, the ProShares Bitcoin Strategy ETF (BITO), fell 13% to an all-time low. The biggest blockchain ETF, the Amplify Transformational Data Sharing ETF (BLOK) declined 6.1%, also hitting an all-time low. 

Trading was halted in the $600 million BITO for a brief period after the fund dove more than 6% in minutes, according to Bloomberg. 

Binance, among the largest crypto exchanges, tweeted that it's walking away from a planned purchase of rival FTX due to unspecified liquidity issues, saying "the issues are beyond our control or ability to help." Coindesk earlier reported, citing sources familiar, that  Binance was concerned about FTX’s financial stability. U.S. regulators are investigating potential misuse of customer funds at FTX, Bloomberg reported, citing sources familiar. 

Today’s declines add to this year’s woes for cryptocurrencies, ETFs that track them and exchanges that trade them. Bitcoin’s 65% loss far outpaces declines in stocks markets like the S&P 500. 

BLOK has fallen 60% after surging 31% last year and nearly doubling in 2020. BITO has lost 67%. Crypto exchange Coinbase Inc. has plummeted 82% this year. 

There was at least one winner among the shake-up. The ProShares Short Bitcoin Strategy (BITI), which bets on falling bitcoin futures, gained 13% Wednesday. 

 

Contact Ron Day at [email protected] 

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