A number of spot bitcoin ETFs began trading on Jan. 11, with bitcoin surging to $49,000 in the minutes after their launch. The rise was fleeting though, and the price has been heading south since, finally falling through $40,000 moments ago. Bitcoin is now at its weakest price since the beginning of December, but still more than a double from year-ago levels.
At a glance, the new spot products are seeing a gusher of fresh cash, with two – BlackRock’s (IBIT) and Fidelity’s (FBTC) – topping more than $1 billion in assets under management (AUM) in the week since opening for business. That has to be balanced, however, against what’s now a multi-billion dollar outflow from Grayscale’s GBTC product as investors take profits or move to other lower-cost vehicles. In addition to outflows at GBTC, money has been exiting previously existing spot bitcoin exchange-traded products in Europe and Canada as well as futures-based ETFs like ProShares’ (BITO).
Searching for a bottom
The bitcoin trend has turned bearish for the first time since Oct. 2 when the price was $27,530, said 10x Research in a Friday report. That news alone might be comforting to bulls who will remember Oct. 2 of last year as nearly the exact launching point for about a 70% run higher over the ensuing three months.
10x’s central thesis for the first quarter of 2024 was that any ETF-related rally would be fake-out and for prices to decline into March towards $38,000, to this point a prediction that appears to be playing out, though perhaps faster than anticipated.
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