Experts reveal the main reasons for the Bitcoin price crash. How low can BTC price go?
After Bitcoin fell nearly 7% below $44,000, economist Peter Schiff said on X (formerly Twitter) that Grayscale’s Bitcoin Trust (GBTC) may not survive. Schiff questioned GBTC’s ability to advertise aggressively amid falling Bitcoin prices. Now, this skepticism has coincided with the rise of a rival low-cost Bitcoin ETF, sparking fears of GBTC shareholder abandonment. Here’s what this means for you:
Shades of Schiff’s Cast on GBTC and ETF Competition
In a series of X posts on social media, Schiff mentioned an orderly selloff in Bitcoin, Bitcoin ETFs, and related stocks. Schiff attacked investors speculating on the approval of a Bitcoin ETF, indicating they were dumping their stocks. Spot Bitcoin ETFs may have difficulty liquidating Bitcoin in U.S. dollars as they previously relied on Tether for liquidity and price stability.
In the US, Bitwise Invest, Fidelity and BlackRock launched spot Bitcoin ETFs, attracting net inflows of $625.8 million. Grayscale’s Bitcoin Trust lost $95 million, raising questions about investor preference and GBTC’s exorbitant fees. Large Bitcoin transfers from GBTC to Coinbase Prime deposit addresses suggest investor assets could be moving into other ETFs or general sales.
Scaramucci: Grayscale ETF Selling Fuels Bitcoin Decline
On the other hand, despite Bitcoin falling 8% to $42,500 following the ETF’s approval, some market analysts labeled the launch a failure. Anthony Scaramucci, founder of SkyBridge Capital, points to the significant selloff of GBTC shares as a major contributor.
In an interview with Bloomberg Television, Scaramucci highlighted a significant increase in grayscale selling as holders convert their shares from trusts to ETF formats. The SEC’s recent approval of ETFs has prompted many to turn to lower-fee alternatives, resulting in them selling to realize losses.
Grayscale Bitcoin Trust, founded in 2013, posted record first-day sales of $2.3 billion on Thursday, a milestone for an ETF. Following the losses, the trust’s shareholders looked for cheaper alternatives, driving the price of Bitcoin below $43,000 on Friday. GBTC shares fell 5.2% to $38.58 on Friday, compared with Bitcoin’s rise of more than 160% a year ago.
Scaramucci also identified FTX’s role in Bitcoin price selling, making the situation even worse. FTX’s bankruptcy estate is liquidating large crypto assets, which is driving down cryptocurrency prices, he says. This, along with the approval of Bitcoin ETFs, increased market selling. Scaramucci expects FTX’s bankruptcy real estate sale to reduce the oversupply in six to eight trading days.
What’s on Wall Street: Is ETF Marketing Just Over the Horizon?
Scaramucci also cites recent developments in Wall Street ETF marketing. Wall Street’s eight-day silence on these ETFs is expected to end. This signals a market shift as Wall Street actively promotes and sells Bitcoin ETFs. These factors are likely to influence Bitcoin’s direction in the coming weeks as it continues its roller coaster ride.