Bitcoin’s Slide Below $40K Amid FTX Liquidation and ETF Turmoil

The cryptocurrency market is witnessing a significant shake-up as Bitcoin’s value plummeted below $40,000, a decline attributed to a range of factors including the liquidation of holdings by the bankrupt exchange FTX, and the mixed response to newly launched Bitcoin ETFs.

Bitcoin Price Today

Bitcoin, the leading cryptocurrency, has seen its price fall to levels not seen since early December.

• This downturn marks a nearly 20% drop from the high experienced following the launch of several spot exchange-traded funds (ETFs) in January.
• Industry analysts, including those from 10x Research, are closely monitoring the situation, with predictions of a potential bottom near the $38,000 mark.

Why Is Bitcoin Price Down

Initial Surge Because of ETF

The introduction of spot Bitcoin ETFs, including those by BlackRock (IBIT) and Fidelity (FBTC), initially led to a surge in Bitcoin’s price, reaching $49,000 immediately after their launch. However, this increase was short-lived, with values steadily declining since. These ETFs have attracted significant investments, each amassing over $1 billion in assets under management within a week. Yet, this influx has been offset by substantial outflows from other crypto investment products, notably Grayscale’s Bitcoin Trust (GBTC).

FTX and Grayscale

Compounding the market’s volatility, FTX’s bankruptcy estate reportedly sold approximately $1 billion worth of GBTC shares, a move that has been linked to the recent price drops. This liquidation, a part of FTX’s ongoing bankruptcy proceedings, has been a significant contributing factor to the pressure on Bitcoin’s price.

Grayscale’s spot Bitcoin ETF, which converted from a closed-end fund to an ETF, has experienced the most significant trading volume among its peers. Despite this, the fund has seen about $2.8 billion worth of outflows since it began trading, with FTX’s sale contributing to a majority of this exodus.

Current Bitcoin Price

This article is published on BitPinas: Bitcoin’s Slide Below $40K Amid FTX Liquidation and ETF Turmoil

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