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Bitcoin has experienced a nearly 20% decline since the introduction of the first exchange-traded funds (ETFs) directly investing in the token on January 11. On the day the ETFs, offered by entities like BlackRock Inc. and Fidelity Investments, were launched, the digital asset surged to $49,021. However, earlier today, Bitcoin was trading at $39,718, marking a 19% decrease from the peak reached on that day.
BTC Price Drop Leads to Strong Liquidations
Amid the BTC price drop and broader crypto market sell-off, a total of $225 million in liquidations have happened in the last 24 hours, as per data by coinGlass.
In the last two weeks, Bitcoin faced challenges arising from more demanding macroeconomic conditions, as indicated by rising interest rates and a stronger dollar. Additionally, notable selling pressure resulted from traders unwinding their GBTC arbitrage positions and the FTX bankruptcy estate liquidating assets.
Sean Farrell, the head of digital-asset strategy at Fundstrat Global Advisors LLC, has mentioned that the sales by FTX could eliminate a surplus in supply, indicating that the “intense selling pressure from GBTC may soon subside.”
Bitcoin ETFs See Strong Inflows
Bloomberg analysts reported robust trading activity in U.S. spot Bitcoin ETFs, surpassing $2 billion in trading volume on January 22, with GBTC contributing over half of it ($1.013 billion). Fidelity’s trading volume outpaced BlackRock’s for the second consecutive day. Approximately 35% of GBTC outflows found their way into nine other spot Bitcoin ETFs.
Lookonchain data reveals that BlackRock’s spot Bitcoin exchange-traded fund (ETF), iShares Bitcoin Trust, has received a substantial influx of 4,808 BTC, equivalent to approximately $194.4 million, from Coinbase Prime. Currently, the iShares Bitcoin Trust holds a total of 33,431 BTC, valued at approximately $1.33 billion.
This development coincides with the commencement of trading for nine new US spot Bitcoin funds on January 11. Additionally, the Grayscale Bitcoin Trust (GBTC), managing assets worth $22 billion, transitioned from a closed-ended structure to an ETF. Notably, the group experienced a net inflow of $1.2 billion within the first six days of the transition.
Among the newly launched funds, BlackRock’s iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund emerged as key recipients of the increased investor interest, capturing a significant portion of the total inflow. Concurrently, the Grayscale fund witnessed an outflow of $2.8 billion during this period.
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