The launch of spot Bitcoin ETFs was followed by a brief spike in the price of Bitcoin to nearly $49,000, sparking temporary euphoria in the crypto community. However, after 2 days, the price of BTC fell below $43,000, its average price since the beginning of December. Are investors already focused on the next narrative after a “sell the news” episode?
Spot Bitcoin ETF: finally a “sell the news”?
When spot Bitcoin ETFs hit the market on Thursday, the crypto community was able to benefit from a BTC at $49,000 in an instantwhich creates a brief euphoria in light of an event that has been expected since June 2023, when the largest asset manager in the world, BlackRock, formalized its candidacy for the launch of an ETF Bitcoin spot.
Explosion in the price of Bitcoin upwards or simply “sell the news” after an event already taken into account by the market, forecasts regarding Bitcoin have been good in recent weeks.
After 2 days of observation, it seems that the market has chosen the second option. In fact, after the price of BTC reached its highest point in more than 2 years, it fell back to around $43,000, its roughly average price since early December last year.
Evolution of the Bitcoin price from the beginning of December 2023 to today
As soon as the ETFs were accepted, most investors seemed to have chosen to take profits below the $50,000 threshold. A decision likely supported by selling around Grayscale’s spot Bitcoin ETF, GBTC, according to Anthony Scaramucci, the founder of SkyBridge Capital.
According to the latest estimates, it appears that GBTC has seen $579 million in outflows over the past 2 days. As a reminder, Grayscale’s Spot Bitcoin ETF is the result of a conversion of its flagship product, the Grayscale Bitcoin Trust, into an ETF. However, Grayscale offers much higher fees (1.5%) than its competitors in the ETF segment, launched a few days ago.
👉 To understand everything – What is a Bitcoin ETF?
In fact, some ETFs offer almost ridiculous fees (0.20% for Bitwise for example, ie the BTC spot ETF with the lowest fees) or even 0% for Ark Invest, Invesco or WisdomTree while starting their new investment instrument.
However, it remains unclear exactly to what extent Grayscale’s outflows constituted Bitcoin sales or whether they were redirected to other similar Bitcoin ETFs. At least, According to data collected by Glassnode, the number of BTC held to back ETFs has been declining since Thursday’s launch :
Movements (inflow/outflow) of BTC are used to support Bitcoin ETFs over 3 months
Specifically, we can see an outflow of 357 BTC for the ETF launch day ie. Thursday, and an outflow of 1,253 BTC the next day.
In total, more than $4.6 billion in volume was traded on Thursday, a very good figure according to Bloomberg analysts. Note, however, that these figures combine both incoming and outgoing volumes for the various ETFs.
👉 How to buy Bitcoin in 2024? Be guided step by step
At the same time, the share prices of leading companies in the US market, such as Coinbase or large mining companies, such as Marathon Digital or Riot Platform, also decreased in recent days :
Stock quotes for top crypto companies in the US
However, to establish a more precise analysis of the effect of spot Bitcoin ETFs on the market, it will be necessary to wait some more time. This will also make it possible to judge whether the market has definitively turned against Ether, whose price has risen 14% over the last 7 days.
Trade Republic: earn 4% interest per year on uninvested cash
Source: Green Stock News, TradingView, Glassnode
Receive a roundup of crypto news every Monday via email 👌
What you need to know about affiliate links. This site may contain investment-related assets, products or services. Some links in this article may be affiliate. This means that if you buy a product or register on a website from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no harm to you and you may even get a bonus by using our links.
Investing in cryptocurrencies is risky. Cryptoast is not responsible for the quality of the products or services presented on this site and cannot be held responsible, directly or indirectly, for any damages or losses caused after the use of any product or service highlighted in this article. Investments related to cryptoassets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial means. This article does not constitute investment advice.
AMF recommendations. High returns are not guaranteed, a product with high return potential entails high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital.
To continue, please read our financial situation, media transparency and legal notices pages.