ProShares Bitcoin Strategy ETF Tanks as Crypto Rout Deepens

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Funds exposed to bitcoin fell on Monday as the stock market sold off sharply and investors worried about problems with high-profile crypto platforms.

Shares of the ProShares Bitcoin Strategy ETF BITO,
-20.11%
and the VanEck Bitcoin Strategy ETF XBTF,
-19.68%
were down around 19% on Monday, while the Valkyrie Bitcoin Strategy ETF BTF,
-20.14%
fell almost 20%, according to FactSet data, when last checked.

Bitcoin ETFs battered as stocks trade sharply lower amid growing concern over rising recession odds as investors fear the Federal Reserve may become more aggressive in raising rates to rein in the surge of inflation.

Bitcoin fell 14% on Monday afternoon to $23,450, slipping after Friday’s Consumer Price Index report showed US inflation was higher than expected in May.

Sentiment also appeared to take a hit after crypto lending platform Celsius Networks LLC said on Sunday it would suspend withdrawals, trades and transfers between accounts. The company cited “extreme market conditions” and said in a blog post that the move “would put Celsius in a better position to meet, over time, its withdrawal obligations.” On Monday morning, crypto exchange Binance put a pause on bitcoin withdrawals.

See: Crypto lender Celsius had been dogged by red flags for months before withdrawals were frozen

Sentiment for cryptos is terrible as the global crypto market capitalization has fallen below $1 trillion, Edward Moya, senior market analyst for the Americas at OANDA, said in an emailed note on Monday. “Bitcoin is trying to form a base, but if price action falls below the $20,000 level, it could get even uglier.”

Lily: Bitcoin tumbles from $24,000 in crypto crash. This graph shows how much worse a sell could be.

Bitcoin was trading around $47,000 at the start of the year and was near $40,000 as recently as early May.

Meanwhile, the S&P 500 index is trading in bearish territory on Monday afternoon, falling as U.S. stock market losses worsen this year.

The S&P 500 SPX,
-3.88%
fell about 21% in 2022 based on Monday afternoon trading, while the Dow Jones Industrial Average DJIA,
-2.79%
slid nearly 16% and the tech-laden Nasdaq Composite COMP
-4.68%
plunged more than 30%, according to FactSet data, when last checked.

The drop in bitcoin funds is more brutal.

Bitcoin strategy ETF ProShares has slid about 50% this year, while Bitcoin strategy ETF VanEck and Bitcoin strategy ETF Valkyrie each posted similar losses based on Monday afternoon trading , according to FactSet data, when last checked.

Meanwhile, shares of the Grayscale Bitcoin Trust GBTC,
-19.54%
plunged about 19% on Monday afternoon, taking its losses this year to about 56%, according to FactSet data. Grayscale Investments has filed an application with the Securities and Exchange Commission to convert the Grayscale Bitcoin Trust into a spot bitcoin ETF.


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