After the Bitcoin spot ETF was approved, the price of Bitcoin plummeted. Eric Balchunas, an ETF analyst at Bloomberg, stated on the 13th that this was due to many people buying Bitcoin or GBTC, betting on the short-term approval of the ETF and then immediately selling after it was approved. The real question is, what proportion of these funds will re-embrace Bitcoin exposure?
(A brief summary: “Female Stock Market Guru Bets 25% of Her Wealth on BTC: Bitcoin Expected to Reach $1.5 Million by 2030”)
(Background information: Historic Moment: U.S. SEC Approves 11 Bitcoin Spot ETFs! Full SEC Announcement and Compilation of ETF-related Questions)
After the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs this Thursday (11), the price of Bitcoin surged to nearly $49,000, reaching a new high since December 2021. However, it began to decline continuously afterwards, hitting a low of $41,500 yesterday, with a maximum decline of over 15%.
As of the deadline, it reported $427,897, with a 0.3% increase in the past 24 hours.
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Bitcoin chart. Source: Tradingview
Regarding the price drop, the market suspects that it is related to Grayscale’s selling. According to Arkham data, Grayscale’s GBTC trust account transferred 4,000 bitcoins to Coinbase on the night of the 12th. Coinbase is the broker and counterparty of Grayscale’s GBTC. With the approval of the GBTC spot ETF, the GBTC premium disappeared. Combined with the higher management fees of Grayscale, it is speculated that many users decided to take profits.
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Source: Arkham
Is the outflow of GBTC funds the main reason for Bitcoin’s decline? At the same time, Eric Balchunas, an ETF analyst at Bloomberg, released the latest data on the 13th, showing that in the first two days of Bitcoin spot ETF trading, 9 ETFs received more than $1.4 billion in new capital inflows, surpassing the $579 million outflow from GBTC. The net inflow of funds amounted to $819 million.
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Source: Bloomberg
Eric Balchunas believes that the outflow of funds from GBTC may be due to accounting reasons, but he can only rely on 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.
When asked by netizens why the price of Bitcoin fell despite the overall inflow of funds into Bitcoin spot ETFs, Eric Balchunas explained:
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