the results of the second day of trading, when BTC fell by 10%

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.

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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 :

BTC ETF

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.

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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 :

Share prices of US crypto companies

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.

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Source: Green Stock News, TradingView, Glassnode

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