Latest developments: ETF investors are proving more resilient than many expected during bitcoin’s recent move. In an interview on CoinDesk’s Markets Outlook, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas highlighted several key data points that demonstrate this stability:
- Bitcoin is down more than 40% from recent highs, a move that rattles historically retail-heavy crypto markets.
- During the same period, only 6.6% of Bitcoin ETF assets have exited.
- “For now, the ETF boomers have really come through,” he said.
Why ETF holders hold: Balchunas argues that ETF investors are structurally different from crypto-native traders.
- Many ETF buyers treat bitcoin as a 1%-2% “hot sauce” allocation alongside stocks and bonds, rather than a core holding.
- Their broader portfolios have benefited from strong equity markets, cushioning the psychological blow of crypto losses.
- ETF investors “tend to stay really strong,” Balchunas said, having lived through several market cycles in traditional assets.
The contrast with crypto natives: The same price drop can feel radically different depending on exposure.
- Investors heavily concentrated in bitcoin face what Balchunas described as “existential crisis mode.”
- Leveraged traders and long-term holders may be causing more of the selling pressure than ETF investors.
- “Volatility is the cost of the return,” Balchunas said, noting that bitcoin has historically endured seven or eight similar moves.
Lessons learned from gold ETFs: Balchunas sees parallels between bitcoin and gold as ETF-wrapped assets.
- Gold ETFs suffered a decline of about 40% over six months about a decade ago, with about a third of assets exiting.
- Despite the rebuilt gold ETFs later assets and now hold about 160 billion dollars.
- Bitcoin ETFs briefly rivaled gold ETFs in size before the recent selloff, highlighting how flows can reverse over time.
What comes next: Volatility is likely to continue, but ETFs can anchor bitcoin’s place in traditional finance.
- Balchunas said bitcoin’s 17-year history shows repeated rebounds to new highs after major downturns.
- ETF structures mean Bitcoin now sits alongside stocks, bonds and commodities in mainstream portfolios.
- “A sale doesn’t mean the end,” he said. “It just means it’s a sale.”
