(Bloomberg) — Bitcoin continued to retreat from its highest level in two years, as traders analyzed the results of the much-buzzed first day of trading in exchange-traded funds containing the cryptocurrency.
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“As the first day of ETF trading has passed, it already appears that the cryptocurrency markets have moved on to looking forward to the next narrative,” said Chris Newhouse, a DeFi analyst at Cumberland Labs.
The native cryptocurrency fell as much as 6.5% to $43,179. On Thursday, bitcoin briefly topped $49,000 for the first time since December 2021 after nearly a dozen ETFs began trading. Most other cryptocurrencies were lower, with SOL and Avalanche falling from Cardano Solana by similar amounts.
Share prices of ETFs fell more than the price of Bitcoin.
“There seems to be a lot of Grayscale selling,” Anthony Scaramucci, founder of SkyBridge Capital, said during an interview on Bloomberg TV. Investors who bought the converted fund when it traded at a higher price are booking tax-advantaged losses and replacing them with lower-fee alternatives, he said.
Scaramucci said the bankruptcy of failed cryptocurrency exchange FTX is also leading to a “dumping out” of assets amid heightened market activity around the ETF’s announcement, resulting in very large selling volume for Bitcoin.
While full flow data won’t be available until later Friday or by Tuesday, at least $720 million has flowed into the 10 Bitcoin ETFs that have begun trading, Bloomberg data shows. The Bitwise Bitcoin ETF (ticker BITB) led the way with inflows of nearly $240 million, followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) and iShares Bitcoin Trust (IBIT), according to data available Friday morning.
The long-awaited debut of the 10 Bitcoin ETFs saw nearly $4.6 billion worth of shares traded on Thursday. This was accelerated by Grayscale Bitcoin Trust (GBTC) – which has been in a trust structure since 2013 – recording a volume of $2.3 billion, the largest ever first-day turnover for an ETF.
Shares of so-called cryptocurrency companies also continued their losses. Bitcoin proxy MicroStrategy fell for a sixth day, while miners Marathon Digital and Riot Platforms both fell more than 8%. Coinbase Global, the largest cryptocurrency exchange in the United States, fell 6.1%.
–With assistance from Katie Greyfield and Emily Graffeo.
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