The crypto market is going through a bloody week.

Bitcoin, the largest cryptocurrency by market capitalization, plunged 24.5% this week as Elon Musk, proposals and regulatory issues in China triggered panic selling that contributed to the market crash.

Bitcoin is trading at $36,641 at the time of writing this article.

According to a recent report, Bitcoin exchange-traded funds (ETFs) in Canada are on high alert.

Some bitcoin ETFs affected by the bitcoin price drop:

newspaper reported financial times Today that Bitcoin ETFs released statements of “market turmoil” to warn investors.

The newspaper added that two funds managed by “Horizon” told investors that they would not be able to fulfill purchase and sale orders if market conditions did not improve.

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This is because Horizon ETFs are investing in bitcoin futures on the Chicago Mercantile Exchange, the latter having halted trading due to the sell-off.

As is well known, a forward contract is an agreement that obligates the trader to buy or sell an asset at a specific time, quantity and price.

If bitcoin futures prices remain at low levels, investors are unlikely to want to bet on it in the future and invest in it in the hope that its price will rise.

With the bitcoin price crash this week, futures investors have been turning away from it.

A bitcoin exchange-traded fund (ETF) is a popular investment product that allows people to buy stocks that represent a specific asset, such as gold, or in this case, bitcoin.

Crypto ETFs are very popular because they have given those who know little (and probably don’t want to know) about how Bitcoin works an opportunity to invest without having to hold the digital currency themselves.

However, no such products are yet available to US investors, given that the SEC has so far rejected every Bitcoin ETF so far.

It’s worth noting that while the market turmoil may seem worrisome, Horizon was the only company to report a problem.

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Is the effect general?

Other ETFs in Canada have been doing well so far

CI Galaxy, for example, told in a statement that the Bitcoin ETF has had no issues because its product does not use derivatives but rather invests directly in the cryptocurrency.

Horizon’s ETF problems come after the Canadian central bank warned that bitcoin and other digital assets are high-risk in its annual review of vulnerabilities and risks in the financial sector.

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The bank may also have a role in Canada, and this week’s crash may have alarmed traditional investors who thought they were in a gold rush (though Bitcoin is still more than 280% higher than a year ago).

The Financial Times quoted Mr. Steve Hawkins, CEO of “Horizon”, saying that he hopes to open the eyes of the retail investor public to understanding the volatility of this asset class.

Although not every ETF market is pessimistic, 3iQ’s CEO Fred Bay commented in a note to investors that over a 3-year period we have seen meaningful correction periods and that pulling back from recent highs is perfectly normal and somewhat healthy.

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