Products that facilitate access to cryptocurrencies and promise quick returns have attracted billions in savings from individuals since 2024.
Staying calm is Christian Rodrigues’ mantra, and the last two months have put it to the test. This small-time Bitcoin investor has accumulated thousands of euros in losses in just a few weeks, with the cryptocurrency plummeting , dropping 25% from its all-time highs reached in October. Of everything he had gained since he started buying Bitcoin in 2020, almost half vanished in the last two months. “Personally, I’m taking it very calmly because I see it as a long-term investment,” Rodrigues says. At 40, this advertising professional, originally from Caracas, Venezuela, and now living in Madrid, hopes to use his Bitcoin for his retirement. Although he remains calm, he says he “senses a lot of fear” on social media among digital asset enthusiasts. “Those who recently got in are scared by the volatility,” he explains. Individuals have felt the bitcoin crash like never before thanks to a new financial product that facilitates access to cryptocurrencies and has attracted billions of euros from individuals worldwide.
In January 2024, well before Donald Trump ‘s election to the White House, the US Securities and Exchange Commission (SEC) authorized the first exchange-traded funds (ETFs) linked to the cryptocurrency sector. An ETF is a basket of stocks and other assets that tracks the performance of an index or industry and can be bought on the stock exchange like any other stock. In this case, ETFs typically hold reserves of Bitcoin or shares of companies in the sector, although some products may also be exposed to other cryptocurrencies, such as Ether. Investing in a Bitcoin ETF, for as little as €40, doesn’t require installing any software on your computer or carefully guarding access codes, because the investor no longer has to deal with the digital asset itself. Investing in digital assets has never been so convenient.More information
“Cryptocurrencies have moved from the fringes of the financial system to become a legitimate component of mainstream investment portfolios,” said Michael Cyprys, an analyst at Morgan Stanley, in a podcast published by the bank last November. Investments in Bitcoin exchange-traded funds totaled just over €50 billion at the end of November, according to the CoinMarketCap platform, equivalent to the economies of countries like Slovenia or Estonia.
With returns exceeding 40% annually for some of the most popular ETFs, this market has been particularly attractive to small investors: they account for three out of every four euros invested in these bitcoin exchange-traded funds, according to estimates from the analysis firm Bernstein. “Many people get in hoping for quick profits,” says Rodrigues, who only invests by directly buying bitcoins and has never sold them.
Bitcoin ETF managers, especially the largest one (BlackRock), often promote cryptocurrencies as an alternative to gold, a safe-haven asset, but they are not. Beyond any analysis of their intrinsic value, digital assets lack the demand from central banks that sustains the value of the precious metal. Furthermore, the volume of bitcoins in circulation is much smaller—around two trillion dollars, 15 times less than gold and half that of volatile silver—and thus any massive sell-off drags down its value, as has happened since October.
The price of Bitcoin plummets from its all-time high
In dollarsoct2025novdic80k90k100k110k120k130k110.395,22105.603,8184.358,0989.862,42
From all-time high:
-28.26%
Bloomberg Source C. CURTAINS / FIVE DAYS
The current crash began in mid-October, when Trump’s threat to impose new tariffs on China preceded the largest sell-off in the history of the crypto market: more than $19 billion (€16 billion) in closed positions in 24 hours. Small investors are easy prey in such events because they lack the resources of large fund managers, who can hedge or unwind their positions in seconds in a cryptocurrency market that operates 24/7.
“It’s one of the worst places to go if you need money,” warns Carlos Aránguez, a lawyer from Granada who has been buying cryptocurrencies since 2018. Aránguez, 47, heads the Cryptocurrency Users Association, an awareness group focused on the sector. The lawyer, who reiterates his belief that cryptocurrencies will one day be as important as traditional currencies, acknowledges that they are not assets for depositing savings that might be needed at some point. “I invest what I don’t need to live on, and I do it with the same coldness with which others gamble in a casino,” he says.
Some bitcoin exchange-traded funds (ETFs) are more like a roulette wheel than a fund. They are leveraged on debt, which amplifies both potential returns and losses. Among those in the crypto sector, there are two ETFs that double the daily fluctuation of Strategy ‘s stock , the company founded by Michael Saylor whose business essentially boils down to accumulating bitcoin. After Strategy’s stock plummeted 34% in November, amid the cryptocurrency crash, both ETFs registered losses of 80% and are now among the ten worst-performing ETFs this year.
The current correction reminds Aránguez of the last crypto winter, when Bitcoin lost 70% of its value in just over six months between 2021 and 2022. At that time, he met a Uruguayan couple who had used their mortgage as collateral for a loan of hundreds of thousands of euros to invest in Bitcoin. With the market crash, the financial institution ended up foreclosing on their mortgage. “They lost all the stability they had,” Aránguez warns. Managers at some small cryptocurrency asset management firms, such as Sigma Capital and Token Bay Capital, are already talking about the possibility that fear will persist and drag the market down to post-pandemic levels. Is a new crypto winter on the horizon?
Individual investors not only suffer the most when the market crashes, but they also take very little advantage of boom times. Morningstar explains that small investors tend to buy on rising prices and sell on falling ones , which limits their returns and further drags down the price of Bitcoin. “They think everything is going to collapse,” says Rodrigues. With his long-term strategy, the publicist still allocates around 500 euros a month to acquiring small holdings of Bitcoin.