Exchange trade trade funds between Bitcoin and Ethereum fainted on Monday as fears of a trade war and recession added new uncertainty to the market, shunning investors from risky transactions and shunning them into safer investments such as bonds and dividend funds.
The $50.9 billion ISHARES Bitcoin Trust (IBIT), the world’s largest crypto ETF, fell 7.8%, continuing the slide that began the day after President Donald Trump was sworn in on January 20th.
Other spot crypto funds have fallen as Bitcoin prices temporarily fell below $79,500, according to CoinmarketCap data. Crypto and stocks fell in response to President Trump’s efforts to rebuild the world economy with nationalist policies like tariffs, and his decline this weekend has rattled the stock market even more to eliminate a recession in the near future.
Meanwhile, bond funds like iShares 20+ Financial Debt (TLT) have jumped alongside dividend ETFs like Schwab US Dividend Equity ETFs (SCHD).
“Cryptocurrencies are extremely unstable and investors may choose to reduce their exposure when fears of a recession arise,” Morningstar’s director of passive strategy research, Brian Armour said in an email. “Bitcoin tends to rise along risk appetite and falls when the market is risk-off.”
Other Spots Crypto ETFS Slide: The $17.8 billion loyal, sensible Origin Bitcoin Fund (FBTC) lost 8.3%, while the leveraged ProShare Ultra Bitcoin ETF (BITU) won 18% at $957.3 million. Fund trading at Spot Ethereum continues to decline, with the $1.1 billion grayscale Ethereum Mini Trust (ETH) losing 6.6%. The fund has lost 42% in the past three months.
These declines occur as issuers submit numerous applications to funding in exchange industry, which holds smaller cryptocurrencies, from XRP to Hedera, Hedera and Solana. These applications flooded the Securities and Exchange Commission after Trump showed a more open approach to Crypto and Gary Gensler, who advocated a warning approach to crypto ETFs.
Spot Bitcoin ETF investors are not enthusiastic about the president’s stance on crypto. Since January 21st, the day after Trump was sworn in, IBIT has dropped 24% in his promise that Trump will become “crypto president.”
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