Latest developments: ETF investors have proven more resilient in Bitcoin’s recent selloff than many expected. In an interview on CoinDesk’s market outlook, Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, highlighted several key data points that point to this stability.

• Bitcoin is down more than 40% from recent highs, a move that has roiled the historically retail-heavy crypto market.
• Over the same period, only 6.6% of Bitcoin ETF assets exited.
• “So far, the ETF boom has been really successful,” he said.

Reasons why ETF holders should own: Balchunas argues that ETF investors are structurally different from crypto-native traders.

• Many ETF buyers treat Bitcoin as a 1% to 2% “hot sauce” allocation alongside stocks and bonds, rather than a core holding.
• Their broad portfolios benefit from strong stock markets, cushioning the psychological blow of crypto losses.
• Balchunas said ETF investors “tend to hold very strong assets” because they have lived through multiple market cycles with traditional assets.

Contrast with crypto native: Even the same price reduction can feel very different depending on the level of exposure.

• Investors focused on Bitcoin are facing what Balciunas describes as “existential crisis mode.”
• Leveraged traders and long-term holders may be exerting more selling pressure than ETF investors.
• “Volatility is the cost of return,” Balciunas said, noting that Bitcoin has historically endured seven or eight similar declines.

Lessons from gold ETFs: Balciunas sees similarities between Bitcoin and gold as assets wrapped in ETFs.

• About 10 years ago, gold ETFs fell about 40% in six months, losing about a third of their assets during that time.
• Nevertheless, the gold ETF later restructured its assets and now holds about $160 billion.
• Bitcoin ETFs briefly rivaled the size of gold ETFs before the recent selloff, highlighting how flows can reverse over time.

What happens next: While volatility is likely to continue, ETFs could cement Bitcoin’s place in traditional finance.

• Balciunas said that looking at Bitcoin’s 17-year history, we see that it has repeatedly rebounded to new highs after significant declines.
• Due to the structure of ETFs, Bitcoin now sits alongside stocks, bonds, and commodities in mainstream portfolios.
• “A decline does not mean the end,” he said. “It just means sales.”