Bitcoin price falls below $41,000 as investors exit the SEC-approved Grayscale Bitcoin Trust.
Posted: Jan 22, 2024 9:09 AM Updated: Jan 22, 2024 9:09 AM
Edit and fact check date: January 22, 2024, 9:09 AM
briefly
Bitcoin price fell below $41,000 after the SEC-approved Grayscale Bitcoin ETF suffered investor outflow.
The price of decentralized cryptocurrency Bitcoin (BTC) fell below $41,000 on Monday morning, continuing its downward slide since the U.S. Securities and Exchange Commission (SEC) approved several spot Bitcoin ETFs in the United States earlier this month. According to data from CoinGecko, Bitcoin is currently trading around $40,960 (at the time of writing), reflecting a 2.4% decline on the day and a 4.5% decline over the past week.
The decline in Bitcoin price has been linked to investors exiting positions in the Grayscale Bitcoin Trust (GBTC) due to a conversion to a spot Bitcoin ETF after realizing post-accreditation profits.
Prior to converting the fund to a cash ETF, GBTC shares were accessible exclusively to accredited investors and were subject to a six-month lock-up period following purchase.
Investors now have the option to redeem GBTC shares for Bitcoin, with more than $2.2 billion exiting the fund last week. This led Grayscale to transfer hundreds of millions of dollars of Bitcoin to its custodian, Coinbase, for sale. These outflows served to put selling pressure on Bitcoin and contributed to the price decline in the two weeks following the SEC approval of the spot Bitcoin ETF.
Analysts also noted that the ETF approval was “priced in,” meaning Bitcoin was not expected to experience a significant or prolonged rise following approval. This perspective has led cryptocurrency investors to engage in “news selling” behavior following the ETF’s approval.
Cryptocurrency market reaction
The broader cryptocurrency market fell 2.7% in the past day, trailing Bitcoin to $1.68 trillion, according to CoinGecko data. The day after the SEC approved 11 spot Bitcoin ETFs for trading, the global cryptocurrency market cap soared to $1.86 trillion.
Among the top 10 cryptocurrencies by market capitalization, Solana and Cardano had the biggest declines over the past day, down 5.5% and 4.9%, respectively.
The decline in Bitcoin prices follows the SEC’s approval of a spot Bitcoin ETF, which led investors to cash out their profits and withdraw from Grayscale’s Bitcoin Trust (GBTC), which converted to a spot ETF, increasing market volatility. I did it.
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Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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alice davidson
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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