With the news that global crypto ETPs suffered record monthly outflows of $3.76bn in November 2025, reflecting a retreat in crypto prices from historic highs, Kenneth Lamont, Principal, Manager Research at Morningstar, has shared his thoughts.
Crypto’s recent pullback has been painful for new investors, but volatility is a feature, not a bug, of crypto investing. Global crypto ETPs suffered record monthly outflows of USD 3.76bn in November 2025, reflecting both the retreat in crypto prices from historic highs and the relative youth of the ETP market itself. For example, a UK investor who bought a bitcoin ETP on 8 October 2025 – when the FCA lifted its retail ban – would have been nursing losses of around 27% just two months later.
“History suggests this is far from unusual. Between the end of March and June 2022, the price of bitcoin fell by close to 60%, illustrating the scale and speed of drawdowns investors must tolerate.
“Unanchored by any clear fundamental valuation, crypto prices are ultimately driven by market sentiment – and sentiment can shift abruptly. Investors have consistently proved poor at market timing, and those errors are magnified when volatility is elevated, as it is in crypto markets. A buy-and-hold allocation, made within an already diversified portfolio, is therefore far more likely to deliver acceptable long-term outcomes.
“Bitcoin, after all, is no longer an outsider trade; it is a wager that US institutions keep the door open – and that liquidity continues to do the heavy lifting. Ethereum represents a more nuanced wager on the uptake and monetisation of blockchain technologies.”
Source – Morningstar Direct
