(CTN News) – As market watchers observed the selling off of Grayscale’s spot bitcoin ETF, bitcoin BTC -0.17% reached as high as $40,000 at various points during the day on Wednesday but largely remained below that figure.
According to The Block’s Price Page, the price of the world’s largest cryptocurrency by market capitalization was $39.672 at 4:37 p.m. Eastern Time. Over the past two weeks, bitcoin’s price has declined nearly 14%, despite an increase of 1.3% in the past 24 hours.
Trying to summarize why the asset has been sliding since the launch of spot ETFs earlier this month — the price of the new products exceeded $48,000 on the first day of trading — Bitwise executive Matt Hougan stated on Tuesday that there has been an “expectations-led” sell-off in recent days.
Rather, it is an expectation-driven sell-off, not an ETF-led one. ETFs are net buyers of Bitcoin. A market pivot took place to buy both spot bitcoins and derivatives as soon as the ETF was approved.”
Volume of Bitcoin ETF trading
As of this writing, the total trading volume for all spot bitcoin ETFs has exceeded $20 billion, according to data provided by The Block. About 90% of the total volume is accounted for by products offered by Grayscale, BlackRock, and Fidelity.
The bulk of Grayscale’s volume comes from investors selling the fund, which is a conversion of the firm’s flagship GBTC fund.
In Hougan’s opinion, the market overestimated the short-term impact of ETFs and was expecting higher net flows into ETFs than we have seen to date.” Now, the market is unwinding that bet,” he added, adding that the market overestimated the short-term impact of ETFs.”
A significant drop in trading volume was generated by Grayscale at the time of his post, which was about $463 million. Grayscale also revealed that spot bitcoin ETFs traded for $2.3 billion on their first day.
A decrease in GBTC volume today may indicate an exhaustion in the selling, Balchunas stated.