The Bitcoin spot ETF has been approved for many days, but the price of Bitcoin has not risen as expected. Instead, it has continued to fall, even falling below 42,000 USDT.
After the approval of Bitcoin ETF, the prices of altcoins generally rose by more than 10%. Among them, ETH rose from 2450 USDT to more than 2700 USDT, and the ETH/BTC exchange rate rose to 0.061, a three-month high. The community joked that "SEC approved the ETH ETF". Currently, ETH has fallen back to 2530 USDT. The strengthening of ETH has also led to a surge in the prices of Ethereum ecosystem OP and ARB in the past week, both of which have set historical highs. In addition, TIA continues to strengthen and continues to set new highs.
After the Bitcoin spot ETF was approved, the BTC price did not rise or fall. There are two reasons:
First, the favorable news has landed. Since October 2023, there have been continuous positive news about the approval of spot ETFs, pushing the price of BTC from 27,000 USDT to 48,988 USDT. Especially after the two false news of "CT fake news" and "SEC official account was stolen", the market potential has been consumed and the upward momentum is insufficient.
The second is the selling of Grayscale GBTC. After Grayscale's Bitcoin spot ETF was approved, the GBTC discount narrowed to 1.9% the day after the approval. Grayscale then transferred 4,000 BTC to Coinbase Prime, and may conduct ETF redemption activities. According to statistics, Grayscale GBTC outflowed nearly $579 million in two days. The increase in selling pressure is one of the reasons for the decline in Bitcoin prices.
Robinhood Chief Brokerage Officer Steve Quirk commented that most GBTC sellers put their funds into other Bitcoin spot ETFs. SkyBridge Capital founder Anthony Scaramucci believes that since the spot Bitcoin ETF was approved and began trading, the price of Bitcoin has fallen, and part of the reason for this is the selling of GBTC.
As Bitwise Chief Investment Officer Matt Hougan said, the market overestimates the short-term impact of the Bitcoin spot ETF, but also underestimates the long-term impact of the ETF.
The approval of the Bitcoin spot ETF does not mean that a large amount of funds will immediately flow into Bitcoin. It only increases the channels for purchasing Bitcoin and attracts people in traditional finance to participate in Bitcoin trading more conveniently. But just two days later, nine issuers have absorbed $1.4 billion in funds, exceeding GBTC's $579 million outflow, with a total net inflow of $819 million. BlackRock leads with $500 million, followed by Fidelity.
The influx of funds and the selection of funds require a long-term layout, and the short-term wash-out phenomenon is also normal. Judging from the BTC transaction volume before and after the approval, it has been maintained at 40 billion US dollars for 4 consecutive days. This means that although the price is falling, the increase in transaction volume represents that the market's trading behavior is gradually increasing.
Most institutions also hold a positive view of the future of the crypto world.
Ophelia Snyder, president and co-founder of 21 Shares, said the impact of broader Bitcoin access channels like ETFs on the market "cannot be underestimated." Matrixport COO Cynthia Wu mentioned in her 2024 forecast that spot ETFs will bring $50-100 billion in new funds to the crypto market.
$BTC Coinbase said that the approval of spot ETFs is a watershed moment in the expansion of the crypto economy. The launch of various Bitcoin spot ETFs by the world's largest asset management company will attract diversified new investors and stimulate long-term growth and product innovation. At the same time, this represents the latest step in the global shift to digital assets, helping to promote the innovation of the financial system itself. The approval of spot ETFs provides investors with a convenient and familiar way to obtain spot cryptocurrencies. ETFs will provide cryptocurrency exposure to millions of new investors and further consolidate their position as mainstream assets.
Although Bitcoin prices are facing a decline in the short term, this may be the last chance for most people to get on board.
