After the Bitcoin spot ETF was approved, the price of Bitcoin dropped sharply. Bloomberg ETF analyst Eric Balchunas stated on the 13th that this is because many people bought Bitcoin or GBTC, betting on the short-term approval of the ETF, and then sold it immediately after it was approved. The real question is, what proportion of these funds will re-embrace the exposure of Bitcoin.
(Previous summary:
Female stock goddess bets 25% of her fortune on BTC: Spot ETF pushes Bitcoin to $1.5 million by 2030.)
(Background supplement:
Historic Moment: US SEC approves 11 Bitcoin spot ETFs! SEC announces full text, summary of ETF-related questions.)
After the US Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs all at once this Thursday (11), the price of Bitcoin surged to nearly $49,000 that night, reaching a new high since December 2021. However, it started to decline continuously afterwards and hit a low of $41,500 yesterday, with a maximum decline of over 15%.
As of the deadline, it is reported to be $42,789, with a 0.3% increase in the past 24 hours.
Bitcoin price chart. Source: Tradingview
Regarding the price drop, the market suspects that it is related to Grayscale’s dumping. According to Arkham data, Grayscale’s GBTC trust account transferred 4,000 Bitcoins to Coinbase on the evening of the 12th. Coinbase is the broker and counterparty of Grayscale’s GBTC. With the approval of the GBTC spot ETF, the premium of GBTC disappears, and considering Grayscale’s higher management fees, it is speculated that many users decided to take profits.
Image source: Arkham
Is the outflow of GBTC funds the main reason for the decline in Bitcoin?
At the same time, Bloomberg ETF analyst Eric Balchunas released the latest data on the 13th, showing that in the first two days of trading for Bitcoin spot ETFs, a total of more than $1.4 billion in new funds flowed into 9 ETFs, surpassing the outflow of $579 million from GBTC. The net inflow of funds reached $819 million.
Image source: Bloomberg
Eric Balchunas believes that the outflow data of GBTC may be related to accounting reasons, but he can only use the latest data provided by Grayscale. Regardless, it is important for Bitcoin ETFs to continue to grow in terms of trading volume and low fees.
Some netizens questioned why the price of Bitcoin dropped despite the overall inflow of funds into Bitcoin spot ETFs. Eric Balchunas explained:
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