(Bloomberg) -- Investors yanked nearly half a billion dollars from cryptocurrency-linked funds as a global market meltdown sparked the first major selloff for the speculative asset class since it went mainstream via ETFs earlier this year.

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Exchange-traded funds that invest directly in Bitcoin have had four straight days of outflows, totaling roughly $423 million, according to data compiled by Bloomberg. The outflows contributed to the worst weekly exodus since early May for the batch of nearly a dozen spot ETFs that launched in January.

Risk assets have slid worldwide after soft US jobs data on Friday stoked recession fears, adding to a troublesome mix that includes underwhelming corporate earnings and poor seasonal trends. Crypto wasn’t spared: Bitcoin has plunged more than 16% — wiping out more than $150 billion in market value in the last 36 hours and damping the appeal of the ETFs. Ether, the second-largest digital asset, faces the steepest fall since 2021.

The rout marks the first major stress test for digital assets in the era of US cryptocurrency products, which have given everyday investors an easy way to trade in and out of Bitcoin ever since they were grudgingly approved by the Securities and Exchange Commission.

Spot Ether ETFs, which debuted in July after an SEC greenlight, are also seeing outflows. The group’s total net outflows since their debut have now breached the $500 million threshold, data compiled by Bloomberg show.

“They remain speculative assets,” Barry Knapp, managing partner at Ironsides Macro, said by phone. “To think it wouldn’t be volatile in a situation like this — I think it’s to be expected.”

Despite the cascade of selling, dislocations — for now — haven’t been material. A measure of liquidity known as the bid-ask spread has remained in a narrow range of just one basis point for BlackRock Inc.’s iShares Bitcoin Trust (ticker IBIT), for example, even as its shares plunged 11.5%.

Elsewhere in the market, traders who have poured billions into other crypto-linked products are also feeling the pain. The 2x Bitcoin Strategy ETF (BITX), which had inflows of $1.8 billion this year, is down 20% in the past two weeks. The $340 million ProShares Ultra Bitcoin ETF (BITU), which took in around $400 million this year, plunged by 30% on Monday alone.

For some, the slump in crypto is perplexing, given that Bitcoin arose in the wake of the global financial crisis as an alternative to a global financial system that its followers see as deeply flawed.

“The undisciplined approach to monetary and fiscal policy is one of the reasons investors hold Bitcoin in the first place, so there is no reason to reconsider the longer-term bullish outlook for the asset class,” said Zach Pandl, head of research at Grayscale.

To Stephane Ouellette, chief executive officer of FRNT Financial, Bitcoin’s 24/7 trading is going to leave the asset more vulnerable to adverse global events in the short term, heightening its volatility. He cited recent geopolitical crises that have sparked intense selloffs this year as well as the pandemic crash in 2020.

“For traders looking for fast cash last night, BTC would have been a highly attractive option,” he wrote in a Monday note. But “the current environment feeds into the asset’s core thesis. For those that believe monetary policy has been mismanaged since the financial crisis, this is the type of scenario they were envisioning when investing in BTC.”

--With assistance from Vildana Hajric.

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