The value of bitcoin (BTC) experienced a 4.5% decline on Thursday, reaching its lowest point in a month at $40,800. This drop was mirrored by the CoinDesk 20 Index, which tracks major cryptocurrencies, registering a 4.6% decrease in the past 24 hours.
Following the commencement of trading for recently approved spot bitcoin ETFs on January 11, bitcoin’s price, despite a brief initial increase, has now fallen by approximately 13%. As of the latest data available, the newly introduced spot ETFs have accumulated over 68,000 bitcoin in their inaugural week. Conversely, Grayscale’s GBTC has divested around 40,000 bitcoin, resulting in a net addition of about 28,000 to bitcoin ETFs.
Vetle Lunde, a K33 Research Analyst, highlighted that even before receiving regulatory approval in the U.S., various spot bitcoin products were already actively traded globally. Currently, exchange-traded products (ETPs) worldwide hold more than 864,000 bitcoin, providing context to the comparatively modest addition of U.S. vehicles.
Lunde also pointed out that in addition to GBTC’s decrease, Canadian and European ETPs have witnessed significant outflows in the past week, as investors either secure profits or allocate funds to more cost-effective U.S. ETFs.
The ProShares Bitcoin Strategy ETF (BITO), despite not holding any bitcoin and relying on futures, has amassed over $2 billion in assets under management. Lunde noted that this futures-based ETF, constituting 36% of bitcoin contract open interest at the CME Group’s exchange, along with other futures-based bitcoin ETFs, collectively make up 48% of all bitcoin open interest at CME. As these futures-based funds experience outflows, Lunde suggested that they may need to sell their long positions in the futures market, potentially exerting additional downward pressure on bitcoin prices.