State Street Global Advisors and Galaxy Asset Management announced Tuesday the launch of three new cryptocurrency-focused exchange-traded funds (ETFs). The move comes as investors pull back from spot bitcoin funds, reflecting a sense of fear in the market.
Actively Managed Crypto ETFs
According to The newly launched exchange-traded funds include the SPDR Galaxy Digital Asset Ecosystem ETF (DECO), the SPDR Galaxy Hedged Digital Asset Ecosystem ETF (HECO) and the SPDR Galaxy Transformative Tech Accelerators ETF (TEKX), according to Bloomberg. The funds are scheduled to begin trading on Tuesday, according to a statement from the companies.
This partnership marks State Street and Galaxy’s entry into a market that is experiencing significant growth. Outflows One of the exchange-traded funds that trade on the US Bitcoin exchange. Recently, these funds recorded the longest streak of withdrawals, with $706 million exiting the market.
This trend confirms the volatility. Risk feelings among investors, especially in light of the mixed economic data ahead of this month’s Federal Reserve meeting. Anna Paglia, business director at State Street Global Advisors, said:
Unlike traditional ETFs that hold cryptocurrencies directly, these new funds aim to provide a diversified approach. They will invest in crypto-related company stocks and combine them with other ETFs that hold physical Bitcoin or futures. Some investors are uncomfortable with the short-term, volatile price swings of single-currency cryptocurrencies. We believe the next evolution of this market is to offer actively managed digital asset portfolios.
Bitcoin Market Faces Record Outflows
Data Data released on September 6 revealed that net outflows from 12 spot Bitcoin ETFs totaled $170 million, with Fidelity and Grayscale topping the list. Fidelity’s FBTC fund, for example, saw nearly $86 million in outflows, marking its seventh consecutive session of negative inflows.
Grayscale’s Bitcoin Trust (GBTC) has also suffered massive losses, with outflows of $53 million recently. GBTC has lost over $20 billion since its inception, and in just eight days, the fund saw $280 million in outflows.
Other funds, such as Bitwise’s BITB and ARK 21Shares’ ARKB, have also seen outflows, illustrating a broader pattern of Low investor confidence In Bitcoin ETFs, as crypto prices lack significant catalysts to recover from the current decline.
Over the past month, the price of Bitcoin has seen significant volatility, with notable highs and lows, with the largest cryptocurrency hitting a one-month low of $52,600 on Friday. However, Bitcoin has since recovered to $56,740, but is still down 8% over the past two weeks and about 6% over the past month.
As of now, it remains unclear whether easier macroeconomic conditions could serve as a catalyst not only for the BTC price but also for the broader crypto market, with a Fed rate cut key to the next moves.
Featured image by DALL-E, chart by TradingView.com
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