In an interview on CoinDesk’s Markets Outlook, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas highlighted a surprising resilience among U.S. spot Bitcoin ETF investors during the market’s recent, severe drawdown. ETF holders are proving far steadier than the typical crypto-native trader, with just 6.6% of assets exiting despite Bitcoin’s price plunge of more than 40% from its recent highs.
“For now, the ETF boomers have really come through,” Balchunas said during the segment. He argues these investors are structurally different, often viewing bitcoin as a 1%–2% allocation within a broader portfolio. Consequently, their overall financial health remains cushioned by strong traditional equity markets.
However, the same price drop creates an existential crisis for heavily concentrated or leveraged crypto natives. Meanwhile, ETF investors “tend to hold really strong,” having endured multiple cycles in traditional assets. Balchunas noted that bitcoin has historically withstood seven or eight similar drawdowns, with volatility being “the cost of the returns.”
This stability mirrors the journey of gold ETFs a decade ago, which suffered a comparable 40% drop over six months. About one-third of assets left gold ETFs during that period, yet the sector recovered to now hold roughly $160 billion. Bitcoin ETFs recently rivaled gold ETFs in size before the selloff, demonstrating that flows can reverse over time.
Ultimately, while volatility will likely persist, ETFs anchor bitcoin within mainstream finance. Balchunas pointed to Bitcoin’s 17-year history of recovery to new highs after major downturns. “A selloff doesn’t mean the end,” he concluded. “It just means it’s a selloff.”
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