Bitcoin experienced a retreat from its two-year high as traders analyzed outcomes from the much-anticipated first day of ETF trading. Chris Newhouse, a DeFi analyst at Cumberland Labs, commented, “With the first day of ETF trading behind us, it already feels like the crypto markets have moved on to looking toward the next narrative.”
The original cryptocurrency faced a decline of up to 6.5%, reaching $43,179. On Thursday, Bitcoin briefly exceeded $49,000 for the first time since December 2021 following the initiation of trading for nearly a dozen ETFs. Meanwhile, other cryptocurrencies, including Cardano, Solana’s SOL, and Avalanche, experienced similar declines.
Interestingly, the share prices of the ETFs were collectively lower than the price of Bitcoin. Anthony Scaramucci, founder of SkyBridge Capital, noted during an interview on Bloomberg Television, “There seems to be a lot of selling of Grayscale.” He explained that investors who initially purchased the converted trust at a higher price are now realizing tax-beneficial losses and transitioning into lower fee alternatives.
The bankruptcy estate of the failed FTX crypto exchange is also reportedly “unloading” assets amid the heightened market activity surrounding the ETF announcement. This has led to a substantial increase in selling volume for Bitcoin, according to Scaramucci.
Although complete flow data won’t be available until later Friday or by Tuesday, preliminary figures indicate that at least $720 million flowed into the 10 Bitcoin ETFs that commenced trading. Bloomberg data revealed that the Bitwise Bitcoin ETF (ticker BITB) led with nearly $240 million in flows, followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) and the iShares Bitcoin Trust (IBIT).
The highly anticipated debut of the 10 spot Bitcoin ETFs witnessed approximately $4.6 billion worth of shares changing hands on Thursday. This was primarily driven by the Grayscale Bitcoin Trust (GBTC), which has been in a trust structure since 2013 and recorded $2.3 billion in volume, marking the largest-ever first-day turnover for an ETF.
Shares of companies associated with cryptocurrencies also extended losses. MicroStrategy, acting as a Bitcoin proxy, fell for a sixth consecutive day. Mining companies Marathon Digital and Riot Platforms both experienced declines of more than 8%. Additionally, Coinbase Global, the largest US crypto exchange, saw a 6.1% drop in its share price.
In conclusion, the evolving landscape of Bitcoin and ETF trading continues to captivate market participants, fostering an environment where both seasoned investors and newcomers eagerly anticipate the unfolding dynamics and potential shifts in the crypto space.
Source: Bloomberg
