The Bitcoin price has been under significant downward pressure since the Securities and Exchange Commission approved the trading of spot exchange-traded funds in the United States. It fell below $42,000 on Friday, reflecting a decline of 7% in the past 24 hours.
Why Bitcoin Price Fell Below The $42,000 Mark
In a recent interview with Bloomberg, Anthony Scaramucci, founder of SkyBridge Capital, gave his opinion on why the Bitcoin price has been facing bearish pressure since BTC ETFs started trading in the United States. According to Scaramucci, BTC’s recent price decline was triggered partly by sales of Grayscale Bitcoin Trust shares.
Scaramucci said that many shareholders of Grayscale Bitcoin Trust (GBTC), which was recently converted to a spot exchange-traded fund, were selling to realize losses and shifting to lower-fee alternatives. GBTC recorded roughly $2.3 billion in trading volume on Thursday, marking the largest first-day turnover for an ETF.
In addition, Scaramucci mentioned that the bankruptcy estate of the now-defunct FTX exchange has been selling their Bitcoin over the past few days.
On a brighter side, Scaramucci anticipates the situation to turn around for the Bitcoin price in the next few trading days.
Bitcoin’s Trading Volume Hits 15-Month High
Bitcoin has been enjoying interest from traders since the approval of ETFs that track the cryptocurrency. According to a Santiment report, its trading volume recently surged to its highest level since FTX’s collapse in November 2022.
Meanwhile, Bitcoin’s open interest rates for Binance perpetual contracts jumped by more than $426 million on Friday. This represents the highest level on the world’s largest crypto trading platform since January 1, 2024, according to Santiment.
While these positive developments might have been followed by a surprising drop in Bitcoin’s price, the current FUD (Fear, Uncertainty, and Doubt) in the market could signal a potential price reversal.
Hot Take: Bitcoin Price Faces Bearish Pressure After ETF Approval
The approval of spot exchange-traded funds (ETFs) for Bitcoin in the United States has not led to the expected surge in price. Instead, the Bitcoin price has been experiencing significant downward pressure, falling below $42,000. Anthony Scaramucci, founder of SkyBridge Capital, suggests that sales of Grayscale Bitcoin Trust shares and the selling of Bitcoin by the bankruptcy estate of FTX exchange are contributing factors to this decline. However, Scaramucci remains optimistic that the situation will turn around in the next few trading days. Despite the price drop, Bitcoin’s trading volume has reached a 15-month high, indicating continued interest from traders. This conflicting market situation may hint at a potential price reversal in the future.
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