Crypto for Advisors: Crypto ETFs

Global crypto ETFs experienced notable outflows in May, yet diversified investments displayed relative strength; we delve into what the data suggests for long-term investors.

What to know:

Then, in “Ask an Expert,” Bryan Courchesne from DAiM discusses how investors can navigate the existing market landscape.

Crypto ETFs: Analysis of May Trends and Future Outlook

May concluded two months of consecutive net inflows, with global crypto ETP flows shifting back to substantial redemptions. As reported by TrackInsight data, global digital-asset investment products faced $2.39 billion in net outflows, contrasting with $1.79 billion of net inflows in April, leading to a reduction in total assets under management from $158.7 billion to $141.1 billion. Almost all redemptions came from U.S.-listed vehicles, while flows outside the U.S., which had already slowed in April, turned slightly negative.

The CoinDesk 20 Index (CD20), which represents a diversified selection of the top 20 digital assets, decreased by 1.11% in May after rising 5.45% in April. The more focused CoinDesk 5 Index (CD5) dropped 3.73%, and bitcoin itself fell by 3.56%, marking a stark reversal from April, when bitcoin (up 11.87%) and the CD5 (up 9.91%) led a widespread rally. The return hierarchy also flipped: large caps led in April, while in May the broader index performed better, suggesting that large-cap assets suffered the most during the decline while diversified investments provided some relative safety.

Data from TrackInsight shows that outflows were primarily centered in bitcoin and ether-linked instruments worldwide, whereas segments of the altcoin market, led by XRP, Hyperliquid, and Solana, attracted net inflows, a trend that widened throughout the month.

Top ETF Gainers Globally (by May Net Flows)

• NEOS Bitcoin High Income ETF (BTCI): +$141.8 million; $1.24 billion AUM
• Bitwise Solana Staking ETF (BSOL): +$79.3 million; $672.2 million AUM
• Morgan Stanley Bitcoin Trust (MSBT): +$73.9 million; $260.1 million AUM
• Bitwise Hyperliquid ETF (BHYP): +$62.0 million; $71.1 million AUM
• iShares Staked Ethereum Trust ETF (ETHB): +$56.1 million; $584.3 million AUM
• 21Shares Hyperliquid ETF (THYP): +$49.7 million; $61.6 million AUM
• NEOS Boosted Bitcoin High Income ETF (XBCI): +$42.8 million; $71.8 million AUM
• Franklin XRP ETF (XRPZ): +$38.7 million; $273.8 million AUM
• iShares Bitcoin ETP (IB1T): +$33.1 million; $1.06 billion AUM

U.S.-listed products continued to lead the global crypto ETF market in May. Despite net outflows of $2.37 billion, American-domiciled ETFs finished the month with $119.2 billion in AUM, maintaining approximately 84.5% of the $141.1 billion global market, which aligns closely with April’s 85.1%.

The headline outflow in May marked the end of two months of inflows and was predominantly a U.S., large-cap reversal. Conversely, the list of gainers was largely filled with income, staking, and newly launched products. With the CoinDesk 20 down just 1.11% compared to a 3.73% decline in the large-cap CD5, diversified and altcoin investments exhibited a relative resilience that was corroborated by the flow data. However, that resilience has since been outmatched: by early June, Bitcoin had dropped to around $62,000, and the major indices were down an additional 15% or more, indicating no signs that May’s outflows signaled a bottom and suggesting increasing pressure into June.

— Joshua de Vos, research team lead, Decryptnews

Ask an Expert

Q: Bitcoin’s RSI recently dropped into the low 40s. Why is that significant?

Bitcoin’s Relative Strength Index (RSI) has fallen into the low 40s on key timeframes, which is a relatively rare situation. Similar readings were observed in February 2020 and during the March 2020 COVID crash. In both instances, those oversold conditions preceded strong recoveries and substantial long-term gains. While no indicator can guarantee future performance, historically these periods have often represented attractive accumulation opportunities for long-term investors.

Q: Does this signal present an opportunity today?

Potentially, yes. For investors who remain focused on bitcoin and possess a long-term perspective, periods of market pessimism have historically provided some of the best entry points. The challenge is that purchasing often feels most difficult when sentiment is negative, which is why many investors miss these opportunities.

Q: What advice would you give investors who struggle to evaluate crypto projects?

If you cannot confidently assess factors such as real-world usage, security, tokenomics, decentralization, and adoption metrics, simplifying your approach may be the best course of action. Bitcoin continues to be the most established digital asset, boasting the strongest network effects, the clearest store-of-value thesis, institutional support through ETFs, and a proven ability to endure multiple market cycles.

Q: How can investors separate credible advice from noise?

A: Seek analysts and advisors with verifiable experience, a track record of being correct more often than not, and a history of evidence-based commentary. Be wary of anonymous influencers, paid promoters, and personalities whose primary business model seems to be generating engagement. Often, the difference between successful investing and costly mistakes lies in ignoring the attention machine.

Q: What’s the key takeaway from today’s market environment?

This RSI setup could represent another significant moment in bitcoin’s history. While no outcome is assured, bitcoin has consistently rewarded patience, discipline, and long-term conviction. Investors focused on fundamentals may view current conditions as an opportunity, while those still waiting for unrealistic altcoin narratives to unfold risk missing another bitcoin-led recovery.

— Bryan Courchesne, founder, DAiM

Keep Reading

• Japan’s three largest banks, MUFG, SMBC, and Mizuho, plan to collaboratively issue a stablecoin by March 2027.
• The stablecoin market cap reached a new all-time high of $320 billion while the total market cap of tokenized real-world assets reached $28.9 billion: read the latest research.

Looking for more? Receive the latest crypto news from decryptnews.com and market updates from decryptnews.com/institutions.