Bitcoin Price Hovers Below $40,000 as Grayscale’s Spot Bitcoin ETF Sells Off
Bitcoin’s price reached over $40,000 on Wednesday but remained just below that mark as Grayscale’s spot bitcoin ETF continued to be sold off. The world’s largest cryptocurrency was priced at $39,672, up 1.3% in the past 24 hours but down nearly 14% in the past two weeks.
Reasons Behind the Sell-Off
The decline in bitcoin’s price can be attributed to an “expectations-led” sell-off, according to Bitwise executive Matt Hougan. He explained that investors piled into spot bitcoin and bitcoin derivatives in anticipation of the approval of ETFs. However, the market overestimated the short-term impact of ETFs and is now unwinding that bet.
ETF Trading Volume
Total trading volume for all spot bitcoin ETFs has surpassed $20 billion, with Grayscale, BlackRock, and Fidelity dominating the market. Grayscale’s volume has primarily consisted of investors selling the fund, which is a conversion of its flagship GBTC fund.
Declining Trading Volume for Grayscale
Bloomberg Intelligence senior ETF analyst Eric Balchunas reported that Grayscale’s trading volume was on track to end the day at its lowest level since the launch of spot bitcoin ETFs. On the first day of trading, Grayscale registered $2.3 billion in trading volume compared to only $463 million on the current day.
Hot Take: Is Selling Exhaustion Setting In?
With declining trading volume for Grayscale’s spot bitcoin ETF, some analysts believe it could be a sign of selling exhaustion. As expectations for ETFs have not met initial projections, the market may be reevaluating its short-term impact on bitcoin’s price.
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