In January 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs), marking a significant milestone in the cryptocurrency world. Despite this groundbreaking development, the price of Bitcoin surprisingly trended downwards. The SEC’s approval of 11 spot Bitcoin ETFs was a long-awaited decision in the crypto community. Notable ETFs included those from Ark, Grayscale, and Blackrock, offering investors direct exposure to Bitcoin through standard brokerage accounts

The news was massive, given that bitcoin fans have been asking for these ETFs for years. The fervor reached a peak recently, with Grayscale taking the SEC to court over its denial of the company’s ETF and finance giants like BlackRock and Fidelity applying for their own. In total, 11 companies saw their applications approved. Crypto enthusiasts predicted a 2021-esque bull run.

Indeed, in the days after the SEC's approval, over $2 billion flowed into bitcoin ETFs. But bitcoin prices themselves sunk. Immediately afterward, the crypto shot up by about $3,000 to a price of $48,600; since then, it has dropped down to $41,000 — its lowest price since early December

Possible Reasons for BTC Price Decline

  1. Profit-Taking: The anticipation of ETF approvals likely fueled a run-up in Bitcoin’s price. Once the approval was confirmed, investors probably have decided to take their profits, leading to a sell-off.

  2. Market Expectations and Reality: Some investors might have overestimated the immediate impact of the ETF approvals. While the approvals were positive , they did not necessarily translate to immediate large-scale inflows into the market​​.

  3. Regulatory Concerns: Despite the approval,the SEC did not endorse Bitcoin and warned investors about associated risks. This cautious stance from the regulatory body could have dampened investor enthusiasm.

  4. Market Manipulation Speculations: Prior to the official announcement, there was confusion and speculation due to an unauthorized post from the SEC’s account about the ETF approvals. This incident might have triggered uncertainty and mistrust among investors, impacting the market negatively​​.


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