Bitcoin Slips Below $39,000 as Market Feels Effects of ETF Selloffs
Bitcoin’s price fell below $39,000 early Tuesday morning, continuing the downward trend caused by the recent selloff of Bitcoin ETF shares. At the moment, Bitcoin is being traded at $38,927, which is 4.3% lower than yesterday and 9% lower than last week.
ORDI and SATS Tokens Decline Alongside Bitcoin
The decline in Bitcoin’s price has also affected the ORDI and SATS tokens, which have dropped by 12% and 16% respectively since Monday. These tokens are associated with Ordinals, digital assets linked to a satoshi on the Bitcoin network through an update called Taproot.
Altcoins Also Experience Losses
In addition to Bitcoin, popular altcoins like Solana (SOL), Optimism (OP), and Avalanche (AVAX) have seen losses of 9%, 10%, and 10% respectively since yesterday.
Selloffs from Grayscale Bitcoin Trust Contribute to Sluggish Prices
One major factor contributing to the current sluggish prices is the selloff of shares from the Grayscale Bitcoin Trust (GBTC). The fund had $28 billion worth of assets under management on January 10 when the SEC approved 11 ETFs for trading. However, it has experienced $6 billion worth of redemptions since then.
Impact of GBTC Selling Pressure on Prices
As GBTC redeems its shares, it has been selling off the backing Bitcoin, which puts downward pressure on prices. This has resulted in a decrease in global crypto market capitalization to $1.65 trillion, the lowest level since the beginning of the year.
GBTC’s Unique Situation
GBTC stands out among other Bitcoin ETFs because it started as a closed-end fund in 2013 with a mandatory 6-month lockup period for accredited investors. However, once it was converted into a spot Bitcoin ETF, share lockups were eliminated.
iShares Bitcoin Trust Gains Assets
While GBTC faces selloffs, the iShares Bitcoin Trust (IBIT) offered by BlackRock has gained traction. Within a week, it accumulated over $1 billion in assets under management and now has $1.3 billion worth of assets under management, according to iShares.
Hot Take: Market Downturn Due to ETF Selloffs
The recent decline in Bitcoin’s price can be attributed to the selloffs of Bitcoin ETF shares, particularly from the Grayscale Bitcoin Trust. As GBTC redeems its shares and sells off backing Bitcoin, prices have been affected negatively. However, this situation has opened opportunities for other funds like the iShares Bitcoin Trust to gain assets. It remains to be seen how the market will stabilize after these selloffs and whether Bitcoin’s price will recover.
By
By
By
By
By