Bitcoin (BTC) Price Dips Below $41K as Enthusiasm Wanes Post Bitcoin ETF Launch

Bitcoin (BTC) Price Dips Below $41K as Enthusiasm Wanes Post Bitcoin ETF Launch

Bitcoin (BTC) experienced another 4.5% decline on Thursday, dropping to its lowest point in a month at $40,800. The CoinDesk 20 Index, reflecting major cryptocurrencies, similarly recorded a 4.6% decrease over the past 24 hours.

Since the commencement of trading for newly approved spot Bitcoin ETFs on January 11, the Bitcoin price, after a brief spike, has declined by approximately 13%. Recent data reveals that these newly established spot ETFs have added over 68,000 bitcoins in their first week, while Grayscale’s GBTC has seen a reduction of about 40,000 bitcoins, resulting in a net addition of approximately 28,000 bitcoins to ETFs.

K33 Research Analyst Vetle Lunde emphasized that even before U.S. regulatory approval, numerous spot Bitcoin products were actively traded globally. Currently, exchange-traded products (ETPs) worldwide hold over 864,000 bitcoins, providing perspective on the relatively modest addition of U.S. vehicles so far.

Lunde also noted that, in addition to GBTC exits, Canadian and European ETPs have witnessed significant outflows in the past week as investors either take profits or reallocate funds to more cost-effective U.S. ETFs.

The ProShares Bitcoin Strategy ETF (BITO), despite not holding actual bitcoins, manages over $2 billion in assets under management. Lunde pointed out that this futures-based ETF represents 36% of bitcoin contract open interest on the CME Group’s exchange. Combined, futures-based bitcoin ETFs contribute to 48% of all bitcoin open interest at CME, potentially exerting additional pressure on bitcoin prices as these funds experience outflows and need to close their long positions in the futures market.

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