Will Investor Confidence Return After Crypto ETF Cuts?
As of June 6, cryptocurrency-linked equity funds had the highest negative returns of the entire unleveraged ETF category, according to Bloomberg.
what you should know
The six unleveraged ETFs with the biggest declines so far this year are related to cryptocurrencies. Global X Blockchain ETF Different Funds Have Different Returns
VanEck Digital Transformation ETF sees 64% negative return
Negative Return of 63% and the Bitwise Crypto Industry Innovators ETF
The negative return is 62%.
Following the above, the Defiance Digital Revolution ETF
, Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF
and First Trust SkyBridge Crypto Industry and Digital Economy ETF
They also lost more than 50%.
because it matters
The level of cuts in these ETFs is indicative of general trends in the crypto market and the U.S. economy. The decline in confidence in cryptocurrencies is in line with a general decline in cryptocurrency prices, which has lowered returns for these ETFs.
However, while a slew of new cryptocurrency-linked ETFs are emerging because the actual inflows into these funds are small, Bloomberg reports that these withdrawals have had minimal impact on investors’ overall portfolios.
What will happen next?
Retail investor confidence in crypto-linked funds is unlikely to recover as the future sentiment of the crypto market remains uncertain, which has generally been on a downward trend in recent months. However, once bullish sentiment in the cryptocurrency industry returns, investor confidence in the sector may return, leading to a massive capital inflow and price recovery.
