How’s the Spot Bitcoin ETF Market Progressing? Expectations Might Have Been Dampened!

  • Bitcoin ETF started trading on January 11, and the crypto market is still feeling its effects.
  • Most analysts do not see BTC’s unimpressive price movement as a cause for concern yet.
  • On Monday, Grayscale’s GBTC witnessed a total net outflow of $640 million amidst a general market downturn.

Spot Bitcoin ETFs opened for trading on January 11, and all eyes in the market turned to the United States: Should the outflows from Grayscale be a cause for concern?

Current Status of the Spot Bitcoin ETF Market

bitcoin-btc

Bitcoin ETF started trading on January 11, and the crypto market is still feeling its effects. Following the launch of the Bitcoin ETF, issuers engaged in aggressive fee competition. Many companies entered a price war to attract investors with low fees and waiver periods.

Meanwhile, the expected trading of the spot Bitcoin ETF initially led to a slight increase in Bitcoin’s price. Investors expected it to rise above $50,000, but the price dropped the next day. Bitcoin’s sluggish movement continues, bringing it below $40,000 on January 22.

Most analysts do not yet view BTC’s unimpressive price movement as a cause for concern. According to Bloomberg data, Bitcoin ETFs managed to achieve an almost $20 billion trading volume in the past week. As a result of significant trading volume, Bitcoin surpassed silver as the second-largest commodity ETF player. Now, BTC ranks second in the commodity market, behind only gold.

Concerns arise from GBTC outflows

However, what worried the market was that Grayscale’s dominance lasted only for a day. On Monday, Grayscale’s GBTC witnessed a total net outflow of $640 million amidst a general market downturn. According to Eric Balchunas from Bloomberg, there was a 13% decrease in the outstanding shares of GBTC as of Wednesday.

Nevertheless, the introduction of the Bitcoin ETF sets the stage for more potential crypto ETFs in the coming days. Discussions around the approval of an Ethereum ETF gained momentum as the SEC set the decision date to May.

This is also a significant step towards broader acceptance of cryptocurrency and increased participation from new investors. Bitcoin has gained a degree of legitimacy in the regulated financial space, paving the way for greater acceptance among users and regulators.

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