Crypto News- Bitcoin made several attempts to breach the $40,000 mark on Wednesday but mostly lingered just below, while market observers closely monitored the ongoing sell-off of Grayscale’s spot bitcoin ETF.
As of 4:37 p.m. ET, the price of the world’s largest cryptocurrency stood at $39,672, marking a 1.3% increase over the past 24 hours. However, Bitcoin has witnessed a nearly 14% decline in the last two weeks.
Bitcoin Maintains Position Just Below 40,000 Dollars Amid Grayscale Fund Outflows
Explaining the recent downward trend since the introduction of spot bitcoin ETFs earlier this month—where the price soared above $48,000 on the first day of trading—Bitwise executive Matt Hougan pointed to an “expectations-led” sell-off. Despite ETFs being net buyers of Bitcoin, Hougan emphasized that the current market decline is driven by expectations, stating, “The market front-ran the ETF approval by piling into both spot bitcoin and bitcoin derivatives.”
Bitcoin’s Dance Around 40,000 Dollars: Grayscale ETF Sell-Off and Unmet Expectations
The total trading volume for all spot bitcoin ETFs has surpassed $20 billion, with Grayscale, BlackRock, and Fidelity products dominating and accounting for around 90% of the total volume. Notably, Grayscale’s trading volume, which initially reached $2.3 billion on the first day of spot bitcoin ETFs trading, has dwindled. According to Bloomberg Intelligence senior ETF analyst Eric Balchunas, Grayscale’s trading volume was on track to end the day at its lowest level since the new products launched.
Matt Hougan suggested that the market may have overestimated the short-term impact of ETFs, leading to an unwinding of expectations. Balchunas also noted a potential sign of exhaustion in selling, with Grayscale’s trading volume significantly lower than previous days.
In summary, Bitcoin’s price flirted with $40,000, influenced by the ongoing Grayscale ETF sell-off, as market participants recalibrate their expectations surrounding the impact of ETFs on the cryptocurrency market.