ProShares Bitcoin Strategy ETF tanks as crypto rout deepens

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Funds exposed to bitcoin plummeted on Monday as the stock market traded sharply and investors worried about problems on high-profile cryptocurrencies.

ProShares Bitcoin Strategy ETF BITO Shares,
the VanEck Bitcoin Strategy ETF XBTF,
and the Valkyrie Bitcoin Strategy ETF BTF,
closed about 20% lower on Monday, according to FactSet data.

Bitcoin ETFs are being hit as stocks fall sharply amid growing concerns that the chances of a recession are rising, and investors fear the Federal Reserve may raise rates more aggressively to control rising inflation .

Bitcoin fell 14% Monday afternoon to $ 23,450, sliding after Friday’s consumer price index report showed U.S. inflation was higher than expected in May.

The sentiment also seemed to be successful after the cryptocurrency platform Celsius Network said on Sunday that it would pause withdrawals, exchanges and transfers between accounts. The company cited “extreme market conditions” and said in a blog post that the measure “would put Celsius in a better position to meet, over time, its withdrawal obligations.” On Monday morning, the cryptocurrency exchange Binance put a pause on bitcoin withdrawals.

I will see: Cryptography provider Celsius had been chased by red flags for months before the withdrawal froze

The sentiment for cryptocurrencies is terrible, as the cryptocurrency market cap has fallen below $ 1 trillion, said Edward Moya, senior market analyst for the Americas at OANDA, in a note sent by mail electronic Monday. “Bitcoin is trying to form a base, but if the price action falls below the $ 20,000 level, it could become even uglier.”

Reads: Bitcoin falls by $ 24,000 in a cryptocurrency crash. This chart shows how much worse a sale can be.

Bitcoin was trading around $ 47,000 earlier this year and nearly $ 40,000 in early May.

Meanwhile, the S&P 500 index ended a bearish market on Monday, falling as this year’s U.S. stock market losses intensify.

The S&P 500 SPX,
has fallen about 21% in 2022 through Monday, while the Dow Jones Industrial Average DJIA,
has fallen 16% and the technology-laden Nasdaq Composite COMP,
has dropped nearly 31%, FactSet data show.

The fall in bitcoin funds is more brutal.

According to FactSet, the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF are down more than 50% this year through Monday, while the VanEck Bitcoin Strategy ETF is down nearly 53%.

Meanwhile, the shares of Grayscale Bitcoin Trust GBTC,
it fell nearly 20% on Monday, raising its losses this year to around 56%, FactSet data show. Grayscale Investments has filed a lawsuit with the Securities and Exchange Commission to convert the Grayscale Bitcoin Trust into a one-time bitcoin ETF.

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