The price of Bitcoin (BTC) fell another 4.5% on Thursday, falling to a one-month low of $40,800. This decline has been nearly matched by the CoinDesk 20 Index, which tracks the world’s largest and most liquid cryptocurrencies, which is now down 4.6% over the past 24 hours.
Since the newly approved spot Bitcoin ETFs began trading on January 11, the price of Bitcoin – after a very brief rally – is now about 13% lower.
Looking at the updated data as of yesterday, new ETF issuers added more than 68,000 BTC in the first week of business. However, Grayscale’s GBTC lost nearly 40,000 bitcoins, resulting in a net addition of about 28,000 to its bitcoin ETFs.
K33 Research Analyst Vitel Lund He said that long before US regulatory approval, there were already plenty of spot Bitcoin products being traded around the world. In fact, he said that global exchange-traded products (ETPs) currently hold more than 864,000 bitcoins, putting into some perspective the relatively minor — so far — addition to U.S. vehicles.
Lundy noted that in addition to the GBTC exits, Canadian and European ETFs saw significant outflows over the past week as investors took profits and/or put money into cheaper US ETFs.
Then there’s the ProShares Bitcoin Strategy ETF (BITO) which recently had over $2 billion in assets under management. While the futures-based ETF does not hold bitcoin, it represents 36% of open interest in bitcoin contracts on the CME Group exchange, according to Lundy. Together, futures-based bitcoin ETFs represent 48% of total bitcoin open interest on the Chicago Mercantile Exchange, he added.
As BITO and other futures funds experience outflows, they need to close (sell) their long positions in the futures market, which could put further pressure on bitcoin prices, Lundy said.