Bitcoin (BTC) suffered further selling pressure after the long-awaited approval in the US of spot-bitcoin exchange-traded funds (ETFs) led to a ‘sell-the-news’ situation for the world’s largest cryptocurrency.
Following a surprising high-single-digit dip on Friday, a day after the likes of BlackRock Inc (NYSE:NYSE:BLK), Grayscale and Cathie Wood’s Ark Invest secured permission to list the bitcoin-tracking ETFs on the stock market, the BTC/USD pair traded flat on Saturday before running 2.6% lower on Sunday.
Bitcoin’s lacklustre post-ETF performance is down to the tremendous degree of ETF hype already baked into the market over the past six months, with a spate of profit taking exasperating the losses.
It reflects a common dynamic in the cryptocurrency markets of prices rallying before a big event only to disappoint after the fact.
When Etherereum performed its landmark Merge to proof-of-stake consensus in September 2022, a process that many saw as a major catalysing effect for the network, native blockchain token ether (ETH) lost a quarter of its value in the following two months.
But even if bitcoin is underperforming in the short term, sentiment remains high for its prospects going forward.
Early data also suggests that the appetite for the new bitcoin ETF products is strong.
Grayscale’s GBTC (the largest bitcoin fund in the world)’s first day of trading on the NYSE Arca was marked by remarkable activity, as it emerged as the most actively traded Bitcoin ETF with a trading value of $2.32 billion.
Additionally, it gained recognition as the most actively traded commodity ETF across US markets and ranked as the 9th most traded ETF in the entire US marketplace.
A notable aspect of GBTC's trading was its high liquidity, with a narrow six-basis-point average bid-ask spread throughout the day, according to Grayscale’s internal data.
Sustained interest for GBTC and other ETFs should theoretically lead to sustained buying support for bitcoin as the sole underlying asset.
In the meantime, BTC/USD was swapping for $42,578 at the time of writing, having fallen below the 50-day moving average price point for the first time in three months.
Bitcoin remains over 100% higher year on year – Source: tradingview.com
ETH also failed to spark interest over the weekend, falling more than 4% against the US dollar on Sunday, though early-Monday trades saw a 1.5% recovery to $2,510.
In the wider altcoin space, Solana (SOL), Cardano (ADA), Avalanche (AVAX) and Dogecoin (DOGE) all fell overnight in the low single digits.
Global cryptocurrency market capitalisation currently stands at $1.68 trillion, with bitcoin dominance at 51.2%.
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