For a long time, the arrival of the first American spot Bitcoin (BTC) exchange funds was the big event that the crypto world was looking forward to. Now that they're here, it's a little disappointing. The Bitcoin price has only fallen since approval. However, according to K33 analysts, this will not last long. They write this in a new analysis.
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Bitcoin price experiences negative consequences of positive news
Bitcoin has been worth $11 since its inception Exchange Traded Funds (ETFs) decreased by almost 20%. This largely contradicts expectations; The introduction of these exchange funds is expected to increase the demand for Bitcoin.
Analysts from the research platform K33 mention in their analysis “The toxic gift that just keeps on giving“There are several reasons for the falling price. “The market is currently under structural selling pressure,” says K33. And this pressure comes from multiple angles.
For example, CME futures are seeing a large outflow, but many Bitcoin investors are also currently selling their BTC. Now that the ETF news is finally out, they prefer to take profits. But the situation at an old, now defunct crypto giant is also currently playing an important role.
Bankrupt crypto exchange causes pressure
It is the bankrupt crypto exchange FTX that is liquidating its position in Grayscale's GBTC fund. At its peak, the exchange had more than $1 billion in funds. However, now that GBTC has officially been renamed an ETF, investors can sell their position in this fund.
FTX is said to be among the parties now responsible for the huge outflow from the Grayscale fund. But that won't last long, say the analysts:
“GBTC outflows are relentless but will decline over time. (…) The structural effects should soon subside and allow the Bitcoin price to stabilize at the beginning of February.”
Regardless, Bitcoin ETFs have been extremely successful in their first week. Together, they saw a huge inflow of BTC, even if you include outflows at Grayscale.
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