Bitrabo Editorial
On Tuesday, State Street Global Advisors and Galaxy Asset Management introduced three new cryptocurrency-focused exchange-traded funds (ETFs), amidst a backdrop of increasing withdrawals from spot Bitcoin funds, indicating growing investor apprehension.
New Actively Managed Crypto ETFs
Bloomberg reports that the new ETFs consist of 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). These funds are set to start trading on Tuesday, as confirmed by the companies.
This launch represents State Street and Galaxy’s move into a marketplace facing significant withdrawals from US-listed spot Bitcoin ETFs, which have recently undergone their longest period of outflows, amounting to approximately $706 million.
This trend indicates deteriorating investor confidence, especially given mixed economic indicators ahead of this month’s Federal Reserve meeting. Anna Paglia, chief business officer for State Street Global Advisors, shared:
Unlike conventional spot Bitcoin ETFs that directly hold cryptocurrencies, these new offerings take a more diversified strategy. They will invest in equities of crypto-related firms and blend these investments with other ETFs involving physical Bitcoin or futures contracts. Certain investors are wary of the short-term volatility linked to single-currency crypto assets. We see the next phase of this market as being characterized by the emergence of actively managed digital asset portfolios.
Bitcoin Market Sees Unprecedented Withdrawals
As of September 6, data highlighted that net outflows from 12 spot Bitcoin ETFs totaled $170 million, primarily led by Fidelity and Grayscale. For instance, Fidelity’s FBTC recorded close to $86 million in outflows, marking its seventh day of negative activity.
Grayscale’s Bitcoin Trust (GBTC) has also faced substantial outflows, losing $53 million recently. Since its launch, GBTC has experienced over $20 billion in losses, with $280 million pulled from the fund within just eight days.
In the past month, Bitcoin’s price has shown considerable fluctuations, hitting a one-month low of $52,600 last Friday. However, BTC has since rebounded to around $56,740, although it has declined by 8% in the last two weeks and nearly 6% over the past month.
It remains uncertain if favorable macroeconomic conditions could serve as a stimulus for BTC’s price recovery and for the broader cryptocurrency market, especially with the Federal Reserve’s potential rate cut being pivotal for future movements.
Featured image from DALL-E, chart from TradingView.com