On Tuesday, State Street Global Advisors and Galaxy Asset Management announced the launch of three new cryptocurrency-focused exchange-traded funds (ETFs). The move comes at a time when investors have been pulling out of bitcoin spot funds, reflecting a sense of fear in the market.
Actively Managed Cryptocurrency ETFs
crypto-linked-etfs-as-outflows-build” target=”_blank” rel=”noopener nofollow”>According According to Bloomberg, the newly launched exchange-traded funds include the SPDR Galaxy Digital Asset Ecosystem ETF (DECO), the SPDR Galaxy Hedged Digital Asset Ecosystem ETF (HECO) and the SPDR Galaxy Transformative tech Accelerators ETF (TEKX). Trading in these funds is scheduled to begin on Tuesday, according to a statement from the companies.
This partnership marks State Street and Galaxy’s entry into a market that is experiencing substantial growth. money outflows of US-listed bitcoin ETFs. These funds have recently recorded their longest streak of withdrawals, with a remarkable $706 million leaving the market.
This trend underlines a hesitation feeling of risk among investors, especially in light of the mixed economic data released ahead of this month's Federal Reserve meeting. Anna Paglia, chief trading officer at State Street Global Advisors, said:
Unlike traditional spot bitcoin ETFs that hold cryptocurrencies directly, these new funds aim to offer a diversified approach. They will invest in stocks of crypto-linked companies and combine them with other ETFs that hold physical bitcoin or futures contracts. Some investors are uncomfortable with the short-term volatile price swings of single-coin cryptocurrencies. We believe the next evolution of this market is the introduction of actively managed digital asset portfolios.
bitcoin market faces record outflows
Data On September 6, it was revealed that net outflows from 12 spot bitcoin ETFs reached $170 million, with Fidelity and Grayscale leading the way. Fidelity’s FBTC, for example, recorded nearly $86 million in outflows, marking its seventh consecutive session of negative flows.
Grayscale’s bitcoin Trust (GBTC) has also suffered heavy losses, with $53 million in outflows recently. Since its inception, GBTC has lost over $20 billion, and in just eight days, the fund has seen an outflow of $280 million.
Other funds, such as Bitwise's BITB and ARK 21Shares' ARKB, have also seen outflows, illustrating a broader pattern of declining investor confidence in bitcoin ETFs as cryptocurrency prices lack significant catalysts to recover from the current crisis.
Over the past month, the price of bitcoin has seen significant volatility, with notable ups and downs, as the market’s largest cryptocurrency hit a one-month low of $52,600 on Friday. However, btc has since regained the $56,740 level, but is still down 8% over the past two weeks and nearly 6% over the past month.
For now, it remains to be seen whether easier macroeconomic conditions can be a catalyst not only for the btc price but also for the broader cryptocurrency market, with the Federal Reserve rate cut key to the next moves.
Featured image of DALL-E, chart from TradingView.com
