KEY POINTS
- Bitcoin experienced a notable 2.62% decrease in its value within a single day
- Spot Bitcoin ETFs' fifth day of trading witnessed a remarkable 34% surge in trading volume
- As of 6:10 a.m. ET on Monday, Bitcoin was trading at $40,751.86
Bitcoin, the world's largest crypto asset by market capitalization, struggled as it traded below the $41,000 price point amid the remarkable performance of the recently approved spot BTC exchange-traded funds, which accumulated 95,000 BTCs and hit the $4 billion assets under management (AUM) mark in less than a week of trading.
Bitcoin experienced a notable 2.62% decrease in its value within a single day, coupled with a 4.38% loss over the past seven days, and was trading at $40,668.51 on Monday morning.
This decline has brought Bitcoin dangerously close to the psychologically significant level of $40,000, prompting discussions within the cryptocurrency community about the potential continuation of this correction.
Prominent crypto trader and MN Trading CEO, Michaël van de Poppe, pointed out, "Bitcoin [is] approaching the lower end of its trading range, with altcoins also undergoing a correction." This observation highlights the broader trend of market dynamics, where Bitcoin's movements often influence the behavior of other cryptocurrencies in the ecosystem.
#Bitcoin getting towards the range lows and altcoins continuing the correction.
— Michaël van de Poppe (@CryptoMichNL) January 22, 2024
People losing faith and sentiment starts to switch.
That’s good.
Arthur Hayes, co-founder of BitMEX, has expressed his belief that Bitcoin's value will dip below the $40,000 mark. He further forecasts that this downward trend will persist until Jan. 31, coinciding with the announcement of the U.S. Treasury's quarterly refunding.
$BTC looks mad heavy. I think we break $40k. I went long some 29Mar $35k strike puts. I think we dump into the 31Jan US Treasury qtly refunding annc. Is Janet Yellen or Talkin'? pic.twitter.com/lyjqNmldzh
— Arthur Hayes (@CryptoHayes) January 22, 2024
Bitcoin's recent price decline has coincided with the outstanding success of newly approved spot Bitcoin ETFs in the United States, collectively accumulating an impressive 95,000 BTC and approaching a combined AUM of nearly $4 billion.
According to insights from Bloomberg ETF analyst Eric Balchunas, this influx of capital into the ETFs underscores the escalating investor interest in digital assets and the growing integration of cryptocurrencies into mainstream finance.
Balchunas pointed out a noteworthy trend where, unlike most ETFs that experience a decline in trading volume after their initial launch, these ETFs, which he referred to as the "Newborn Nine," have consistently posted record-breaking volumes.
Notably, the fifth day of trading witnessed a remarkable 34% surge in trading volume.
A noteworthy comparison is the capital inflow into these recently introduced ETFs, which has exceeded the outflows from the Grayscale Bitcoin Trust (GBTC).
GBTC has seen its assets under management decrease by a substantial $2.8 billion in the first six days of trading.
Note: the more we think about it and talk to ppl, prob only a small minority of the GBTC outflows are likely going to the Nine right now as much of it was FTX and traders who arb-ed discount. Also the proportionality of the flows to the size of the firm is almost perfect,…
— Eric Balchunas (@EricBalchunas) January 20, 2024
Among the various ETFs, Fidelity's FBTC and BlackRock's iShares Bitcoin Trust (IBIT) have each attracted over $1.2 billion in inflows.
While FBTC has slightly higher inflows, IBIT currently leads in AUM, with $1.4 billion, compared to Fidelity's nearly $1.3 billion.
As of 6:10 a.m. ET on Monday, Bitcoin was trading at $40,751.86 with a 24-hour volume of $17.14 billion.
The crypto asset's market performance indicates a 2.43% decline in its value over the past 24 hours, with a 4.28% loss observed over the course of the previous seven days.
Furthermore, Bitcoin's circulating supply presently amounts to 19,605,112 BTC and its market capitalization is at $798.94 billion, as per the latest data sourced from CoinMarketCap.
