Bitcoin ETFs Stay Resilient Despite 40% Drop in BTC

Bitcoin has fallen more than 40% from its October highs, yet investors in spot Bitcoin ETFs have shown surprising stability, with just 6.6% of assets withdrawn during the selloff.

Bloomberg Intelligence Senior ETF Analyst Eric Balchunas pointed out key differences between ETF investors and crypto-native holders. Many ETF buyers treat bitcoin as a small 1%–2% allocation alongside stocks and bonds. This diversified approach, supported by strong equity markets, cushions the impact of crypto losses. “For now, the ETF boomers have really come through,” Balchunas said.

By contrast, concentrated bitcoin holders and leveraged traders often face greater selling pressure and the emotional strain Balchunas calls “existential crisis mode.” Historically, bitcoin has recovered from several similar drawdowns.

Balchunas also noted parallels with gold ETFs. A decade ago, gold ETFs fell roughly 40% over six months, losing about one-third of assets before rebounding to hold around $160 billion. Bitcoin ETFs, which briefly rivaled gold in size, show that flows can reverse over time.

Volatility is likely to persist, but ETFs may anchor bitcoin in mainstream portfolios. “A selloff doesn’t mean the end,” Balchunas said. “It just means it’s a selloff.”