Signs of stress are flashing across spot-bitcoin exchange-traded funds after the cryptocurrency sank to a two-month low.

Prices of some of the largest ETFs tracking the token notched the steepest discounts to the value of underlying assets in their short history on Tuesday after bitcoin slumped about 5%. Losses continued on Wednesday, with the original cryptocurrency dropping as much as 5.6%. 

The $16 billion iShares Bitcoin Trust (ticker IBIT) on Tuesday closed about 1.7% below its net asset value—the largest dislocation since it began trading in January. The $9 billion Fidelity Wise Origin Bitcoin Fund (FBTC) saw a 1.1% discount while the $2.5 billion ARK 21Shares Bitcoin ETF (ARKB) and the $2 billion Bitwise Bitcoin ETF (BITB) both closed with discounts of more than 1.4%, also the biggest on record for each, according to data compiled by Bloomberg.

“That’s not a great look,” said James Seyffart, ETF analyst at Bloomberg Intelligence, adding that it would have been more concerning if the discounts were isolated to one fund. “It’s a little out of the ordinary in the fact that we’ve seen premiums and discounts in the range of -1% to +1% and this is bigger. But it’s not groundbreaking.”

Tuesday was the last day of the month, which is a common time for investors to rebalance portfolios, especially around the 4 p.m. closing auction. The largest bitcoin ETFs saw heavy selling pressure near the equity market close, reaching a peak during the time leading into the closing auction, according to Teddy Fusaro, president of Bitwise. The ETFs calculate net-asset value using a 60-minute time-weighted average price for bitcoin, which can lead to differences between market prices and NAV during large price moves in the last hour of the day, as was the case yesterday, he added. 

“We expect such dislocations during periods of high volatility to be common and brief, often occurring in the last few minutes of trading,” Fusaro said. “Currently, all ETFs are trading within a few basis points of their estimated NAV during today’s session. We expect that all of these ETFs will trade at slight premiums and discounts to NAV depending on market conditions and whether or not there is net buying or selling in the marketplace.”

Still, the discounts underscore how bitcoin’s volatility may pose more-complex issues to ETF investors than funds focused on traditional financial assets. At the same time, the volatility creates profitable opportunities for specialized trading firms known as authorized participants who are tasked with keeping the price of the funds in-line with their net asset values. 

“We remain confident that the inherent underlying volatility of crypto as an asset class will drive sustained elevated opportunities in crypto ETFs,” Virtu Financial Inc. Chief Executive Officer Douglas A. Cifu said on a conference call last week to discuss the company’s earnings, which included record performance in crypto market-making operations.

Expectations for fund flows were exceeded after the ETFs were launched as the cohort broke one record after another in the more-than $8 trillion U.S. industry. Hopes remain high that more institutions will adopt spot-bitcoin ETFs as they establish a track record. But the price of bitcoin has historically been affected by the macro-economic environment and a case is building for the Federal Reserve to signal a delay in rate cuts after officials conclude a policy meeting Wednesday. That’s generally a tough backdrop for speculative assets like digital tokens.

“It’s possible it stays at a discount if bitcoin continues to slide, but that remains to be seen,” said Mohit Bajaj, director of ETFs at WallachBeth Capital. 

This article was provided by Bloomberg News.