The introduction of Bitcoin Exchange-Traded Funds (ETFs) has been a highly anticipated development in the crypto space. While many enthusiasts and investors viewed the approval of Bitcoin ETFs as a sign of mainstream acceptance, the aftermath has raised concerns about its potential impact on the broader crypto market.
Bitcoin hits new 2024 lows post ETF approval
Bitcoin ETFs are financial instruments designed to track the performance of Bitcoin, offering investors exposure to the cryptocurrency without directly owning it. The idea behind ETFs is to make Bitcoin more accessible to traditional investors, potentially increasing liquidity and market participation.
They were approved alright. However, they have caused a negative effect on the crypto ecosystem, and many investors worry that the ETFs will tank the market for good.
At the time of writing, the price of Bitcoin (BTC) is $42,706.03, with a 24-hour trading volume of $18,139,484,215.33. This indicates a -0.49% price loss in the last 24 hours and a -2.87% price decline in the last 7 days.
In addition, the global crypto market cap is $1.76 trillion today, down 0.63% in the last 24 hours and 72.44% a year ago. As of today, Bitcoin has a market cap of $837 billion, indicating a 47.53% dominance. Meanwhile, stablecoins’ market cap is $135 billion, accounting for 7.69% of the total crypto market cap.
Bitcoin fell to its lowest point in over a month as excitement over new US exchange-traded funds for the largest digital currency faded. It has fallen for four days in a row, its worst run since mid-December. Smaller crypto tokens struggled to gain momentum, with Ether, BNB, and Solana showing mixed results.
Following the ETF approval, bitcoin temporarily reached a two-year high above $49,000 before falling. As several market experts predicted, the jump and subsequent fast drop are the hallmarks of a “buy-the-rumor, sell-the-fact reaction,” as several market experts predicted.
Supporters of Bitcoin’s controversial status as a store of value believe that the first US spot ETFs for the token will enhance investor access to the cryptocurrency. Skeptics point to 2022’s severe crypto fall and subsequent bankruptcies as grounds to be cautious about wider adoption despite a partial market resurgence last year.
In a post on social media site X, Bloomberg Intelligence’s senior ETF analyst Eric Balchunas stated that the new US spot funds received a net inflow of $819 million during their first two days of trading. This included $500 million for BlackRock’s iShares Bitcoin Trust and $422 million for the Fidelity Wise Origin Bitcoin Fund.
The Grayscale Bitcoin Trust, the largest such fund at $26 billion, had $579 million in outflows after converting to an ETF last week, according to Balchunas. The fund previously had a closed-ended structure and traded at a discount to its underlying holdings last year, prompting investors to speculate on the gap closing.
Market performance today
Crypto market analysts have highlighted a major development in the BTC Miners’ Position Index (MPI), which spiked to 9.43 on January 12. The heightened MPI indicates that miners conducted a higher-than-usual amount of BTC movements, signaling a probable preference for sales.
Despite a recent drop in the Bitcoin price, economists advise caution, emphasizing that additional selling by miners has the potential to put more downward pressure on prices. This finding emphasizes the significance of monitoring miner activity as a potential influence on the overall Bitcoin market.
However, other Bitcoin enthusiasts see the price drop as an extra purchasing opportunity for objectives around $200,000. BTC is not the only digital asset trading on the down low. Here’s the market performance at the start of the week.
The current price of Ethereum (ETH) is $2,513.04, with a 24-hour trading volume of $13,363,002,284.50. This indicates a -1.51% price drop in the last 24 hours and a 12.85% price gain over the last 7 days.
Shiba Inu (SHIB) is now priced at $0.059666, with a 24-hour trading volume of $110,781,841.11. This indicates a -2.79% price drop in the last 24 hours and a 7.14% price gain over the last 7 days.
The current price of Dogecoin (DOGE) is $0.08086, with a 24-hour trading volume of $453,906,533.94. This indicates a -1.54% price drop in the last 24 hours and a 4.14% price gain over the last 7 days.
Shiba Inu’s (SHIB) price is $0.05967 today, with a 24-hour trading volume of $110,871,836.61. This reflects a -2.71% price decrease in the last 24 hours and a 7.22% price increase over the last 7 days.
