New ETF launches continue despite crypto weakness… asset managers keep betting

YM Lee

Summary

It reported that new crypto ETFs continue to be launched even as the crypto market remains in a corrective phase.
It said that as Bitcoin prices fell, the average cost basis for U.S. spot Bitcoin ETF investors has moved into loss territory, increasing unrealized losses.
It reported that while there have been large outflows from Ethereum ETFs and Bitcoin ETFs over the past three months, asset managers are showing confidence in the long-term investment thesis for crypto.

Forecast Trend Report by Period

Even as the crypto market enters a corrective phase, exchange-traded fund (ETF) managers are continuing to roll out new products.

According to Bloomberg on the 11th (local time), at least two asset managers have filed paperwork with U.S. regulators this month for new crypto ETFs. Bitwise Asset Management has moved to register an ETF linked to Uniswap (UNI), while ProShares applied for approval of leveraged Bitcoin (BTC) and Ethereum (ETH) ETFs. 21Shares resubmitted filings related to ETFs based on Ondo and Sei.

More than 140 crypto-related ETFs are currently listed in the U.S., and more than 10 digital-asset ETFs have been launched so far this year alone. A BNB staking ETF is also set to launch.

Market conditions remain weak. Bitcoin has plunged this month and is trading around $66,000. According to Sean Rose of Glassnode, the average purchase price for investors in U.S. spot Bitcoin ETFs is about $84,100, putting them in a significant unrealized-loss zone at current prices.

Over the past three months, more than $1.5 billion has flowed out of Ethereum ETFs and more than $3.5 billion out of Bitcoin ETFs.

Todd Sohn, Chief ETF Strategist at Strategas, said that “21Shares and Bitwise have conviction in the long-term investment thesis for crypto.” He added, however, that “if underperformance persists, the scale of inflows could be limited.”