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Market Extra: ProShares Bitcoin Strategy ETF tanks as crypto rout deepens


Funds with exposure to bitcoin were plummeting Monday as the stock market sold off sharply and investors fretted over problems at high-profile crypto platforms.

Shares of the ProShares Bitcoin Strategy ETF

and the VanEck Bitcoin Strategy ETF

were down around 19% Monday, while the Valkyrie Bitcoin Strategy ETF

tanked almost 20%, according to FactSet data, at last check.

Bitcoin ETFs are being pummeled as stocks trade sharply lower amid growing concern that recession odds are climbing, with investors fearing the Federal Reserve may become more aggressive raising rates to tame surging inflation.

Bitcoin was down 14% Monday afternoon at $23,450, sliding after Friday’s consumer-price index report showed U.S. inflation running hotter than expected in May.

Sentiment also appeared to take a hit after crypto lending platform Celsius Networks LLC said Sunday that it would pause withdrawals, swaps, 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 honor, 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 ahead of withdrawal freeze

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

Read: Bitcoin tumbles through $24,000 in crypto crash. This chart shows how much worse a selloff could get.

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

Meanwhile, the S&P 500 index is trading in bear market territory Monday afternoon, falling as the U.S. stock market’s losses this year deepen.

The S&P 500

has dropped about 21% in 2022 based on Monday afternoon trading, while the Dow Jones Industrial Average

has slid almost 16% and the technology-laden Nasdaq Composite

has plunged more than 30%, FactSet data show, at last check.

The drop for bitcoin funds is more brutal. 

The ProShares Bitcoin Strategy ETF has slid around 50% this year, while the VanEck Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF each have seen similar losses based on Monday afternoon trading, FactSet data show, at last check.

Meanwhile, shares of the Grayscale Bitcoin Trust

have plunged around 19% Monday afternoon, bringing its losses this year to about 56%, FactSet data show. Grayscale Investments has filed an application with the Securities and Exchange Commission to convert the Grayscale Bitcoin Trust into a spot bitcoin ETF.

In One Chart: How big is the stock-market selloff? The S&P 500 erased $9.3 trillion from its market cap

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