Bitcoin (BTC) experienced a notable 4.5% decrease, reaching a one-month low of $40,800 on Thursday. This decline corresponds with the overall trend seen in the CoinDesk 20 Index, reflecting a 4.6% drop in the past 24 hours.
Approved Bitcoin ETFs and Their Impact
After the approval of the latest spot Bitcoin ETFs on January 11, an initial boost propelled Bitcoin’s value briefly. However, this enthusiasm quickly faded, leading to a significant 13% drop in the cryptocurrency’s price. While there have been substantial inflows into the new spot Bitcoin ETFs, notable outflows, especially from Grayscale’s GBTC, have added complexity to the overall market scenario.Recent data indicates that the new spot ETF issuers collectively acquired over 68,000 bitcoins during their inaugural week of trading. Conversely, GBTC experienced an outflow of about 40,000 bitcoins during the same period. This resulted in a net addition of approximately 28,000 bitcoins to Bitcoin ETFs.
The Global Landscape and Trends Among Investors
Analyst Vetle Lunde of K33 Research highlighted the global scenario, emphasizing that numerous spot Bitcoin products were trading globally even prior to U.S. regulatory approval. Currently, over 864,000 bitcoins are part of these global investments, with the new U.S. investments being relatively modest compared to the rest of the world.
In addition to individuals exiting Grayscale’s GBTC, investors in Canada and Europe withdrew funds from their Bitcoin investments last week, either capitalizing on profits or opting for more affordable U.S. investment opportunities.
Complicating matters further is the ProShares Bitcoin Strategy ETF (BITO), managing over $2 billion in assets without holding any actual Bitcoin. Despite its lack of direct ownership, it exerts significant influence on the Bitcoin market. Analyst Vetle Lunde highlighted that such investments now constitute 48% of the overall interest in Bitcoin.
What Could the Future Look like for BTC?
As individuals withdraw funds from investments such as BITO, there may be increased pressure to sell certain Bitcoin-related assets, potentially causing a short-term decline in Bitcoin’s price and presenting challenges for the cryptocurrency.
