Bitcoin’s Price Falls Below $41,000 as Investors Exit SEC-Approved Grayscale Bitcoin Trust
In Brief
Bitcoin’s price fell below $41,000 after the SEC-approved Grayscale Bitcoin ETF experienced investor outflows.
Decentralized cryptocurrency Bitcoin (BTC) price fell below $41,000 on Monday morning, continuing its decline subsequent to the approval of several spot Bitcoin ETFs in the United States by Securities and Exchange Commission (SEC) earlier this month. At present, Bitcoin is trading at approximately $40,960 (at the time of writing), reflecting a 2.4% decrease for the day and a 4.5% decline over the past week, according to data from CoinGecko.
The decrease in Bitcoin’s price is associated with investors realizing their profits after the approval and subsequently exiting their positions in the Grayscale Bitcoin Trust (GBTC) due to its transformation into a spot Bitcoin ETF.
Prior to the conversion of the fund into a spot ETF, GBTC shares were exclusively accessible to accredited investors and subjected to a six-month lockup period post-purchase.
With investors currently having the option to redeem their GBTC shares for Bitcoin, over $2.2 billion has exited the fund in the last week. This has led Grayscale to transfer hundreds of millions of dollars in Bitcoin to its custodian Coinbase for selling. These outflows have played a role in creating selling pressure on Bitcoin, contributing to the decline in price over the two weeks since the approval of the SEC spot Bitcoin ETFs.
Analysts have additionally noted that the approval of the ETF was “priced in,” signifying that Bitcoin wasn’t anticipated to experience significant or prolonged increases following the approval. This perspective has led cryptocurrency investors to engage in “sell the news” behavior in the aftermath of the ETF approvals.
The Crypto Market’s Reaction
The wider cryptocurrency market has declined following Bitcoin, decreasing by 2.7% over the last day, reaching $1.68 trillion, as reported by CoinGecko data. The global cryptocurrency market capitalization had surged to as much as $1.86 trillion the day following the SEC’s approval of 11 spot Bitcoin ETFs for trading.
Among the top 10 cryptocurrencies based on market capitalization, Solana and Cardano have experienced the most significant drops over the past day, falling by 5.5% and 4.9%, respectively.
The decline in Bitcoin’s price follows the approval of spot Bitcoin ETFs by the SEC, prompting investors to cash in profits and exit Grayscale’s Bitcoin Trust (GBTC) after its conversion into a spot ETF, leading to increased market volatility.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
