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Crypto ETPs Saw ‘Abysmal’ Returns in June


blockworks.co 05 July 2022 19:03, UTC
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The worst-performing European ETPs last month were all crypto products, and digital asset-focused ETFs in the US also notched some of the worst returns during the month. 

The highest negative returns during the month in Europe went to the 21Shares Aave ETP, which yielded -52.6% in June, according to Morningstar data.

“These are abysmal returns,” ETF.com Senior Analyst Sumit Roy told Blockworks. “As volatile as crypto is, to see 50% declines in one month is truly astounding. It just speaks to how treacherous the current crypto market is.”

The firm’s Bitcoin Cash ETP, Ethereum ETP and Bitcoin Suisse ETP also made the list of top 15 worst-performing ETPs (exchange-traded products) during the month, with returns of -47.5%, -46.5% and -40.5%, respectively.

“As we’ve experienced turbulent markets, we’ve stayed in close communication with our clients and seen very little outflows as investors hold strong for the long-term,” Arthur Krause, 21Shares’ director of ETP product, told Blockworks in an email.

“In fact, we’ve seen inflows as investors buy the dip.”

The 21Shares Bitcoin ETP and Ethereum ETP recorded the biggest inflows in the European market in June, Krause added, with $20 million and $10 million in net new assets, respectively. The company launched the first ETP within its planned “crypto winter” suite last week in an effort to help investors navigate the challenging market environment. 

“The entire crypto ecosystem is under pressure, as evidenced by the fact that bitcoin fell below the $20,000 mark at the end of the month, breaking a key technical level,” Morningstar Investment Specialist Valerio Baselli said in a Tuesday blog post. 

Bitcoin’s price was about $19,620 at 12:30 pm ET, according to data compiled by Blockworks — down roughly 0.5% from 24 hours ago and down about 34% from a month ago.

June was the worst month since 2011 for bitcoin, Baselli said, noting that the asset — originally thought to be uncorrelated to equity markets — plunged in parallel with US equities. The second quarter of 2022 was the worst since 1970 for the S&P 500, while the Nasdaq recorded its weakest half-year since 1998, he added.

“The asset class is firmly entrenched in a deep bear market, and these returns are a reflection of that,” Roy said. “It’s a reminder that crypto and crypto ETPs are extremely high risk, with a similar risk profile to speculative tech stocks.”

As for US ETFs, seven of the 15 worst-performing funds in June were crypto funds, according to Morningstar Direct data obtained by Blockworks.

VanEck’s Digital Assets Mining ETF (DAM) saw the lowest monthly returns within the category, at -43%. The asset manager’s Digital Transformation ETF (DAPP) endured a total return of -41% over the span. 

Bitcoin futures ETFs saw similar returns, with such products by ProShares, Valkyrie Investments and VanEck also yielding roughly -41%. Global X’s Blockchain and Bitcoin Strategy ETF, which invests in a mix of equity securities of blockchain companies and US-listed bitcoin futures, performed only about a half percentage point better.

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