Bitcoin ETF Gold Rush Turns Into An Epic Bust

The bitcoin ETF gold rush is turning into an epic bust. And it’s getting uglier by the day.

Shares of the 10 largest bitcoin ETFs, including iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin (FBTC) and Grayscale Bitcoin Trust (GBTC), are down an average of 49% from their highest levels in 52 weeks, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.

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And the bitcoin crash has finally reached a key point. The total return on the largest spot bitcoin ETF, the $51.5 billion-in-assets iShares Bitcoin Trust, is 20.01% from its inception date of Jan. 11, 2024. That’s essentially the same as the 19.97% return of the State Street SPDR S&P 500 ETF (SPY).

In other words: Investors would have gotten the same return as bitcoin with the S&P 500 — while enduring much less stomach-churning volatility.

“Bitcoin is a volatile asset and crashes aren’t unusual,” said Roxanna Islam of TMX VettaFi. “This is the first significant crash since broad adoption by retail investors, institutions and even the (Trump) administration — which has been a shock to many that haven’t experienced a bitcoin crash.”

The Bitcoin ETF Surprise

When many of the spot bitcoin ETFs launched in 2024, investors often saw them as a nearly endless wave of new bitcoin buyers. But they’ve turned into more of a vacuum cleaner as of late.

With bitcoin prices falling, money is surging out of bitcoin ETFs. “As a group, they bled $4.5 billion in outflows over the past 3 months,” Islam said. “Bitcoin has fallen due to a risk-off market sentiment, which is worsened by selling pressure especially at key price levels.”

It’s important to note, though, that the largest bitcoin ETFs are still positive contributors to flows of money into cryptocurrency over their lifetimes. IShares’ IBIT still took in $21 billion in net inflows over the past year — even after losing $2.6 billion in net outflows over the past three months, Islam said.

Bitcoin Isn’t Digital Gold After All

During the bitcoin ETF frenzy, some investors held cryptocurrency out as some kind of store of value. Think of it has digital gold.

But it hasn’t worked out that way in 2026. Rising worries about inflation pushed the price of gold up as bitcoin ETFs have fallen. SPDR Gold Shares is up more than 146% since the inception of spot bitcoin ETFs. And the gold ETF is up nearly 17% just this year.

“While bitcoin has some characteristics of a store of value, it has recently behaved similar to a tech asset due to growth expectations and its link to technology,” Islam said. “Still, as a relatively nascent asset class, bitcoin’s role may continue to evolve over time.”

At some point, though, some bitcoin ETFs that don’t accumulate enough in assets will likely close.

“There has always been a high risk of liquidation regardless of bitcoin prices,” Islam said. “We’re in a very oversaturated market for crypto ETFs with over 150 products currently active … smaller products may close over time, but that’s a typical part of the ETF innovation cycle.”

Bitcoin ETFs: What Now?

But just because bitcoin ETFs are falling doesn’t mean you must dump yours. Volatility is part of the asset class’s nature.

“Many investors hold Bitcoin in small allocations in their portfolios and have risk tolerance to hold through crashes,” Islam said. “Some investors may also choose to liquidate at certain price levels to capture gains.”

Biggest Bitcoin ETFs

By assets

Sources: ETFDB, S&P Global Market Intelligence

Follow Matt Krantz on X @mattkrantz

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