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Bitcoin declines 3.5% to $41,000 as enthusiasm for spot Bitcoin ETFs diminishes, while GBTC outflows persist.
On January 18, Bitcoin (BTC) experienced significant declines, occurring one week after the initial Bitcoin spot ETFs commenced trading on various platforms.
At 9:50 p.m. UTC on Thursday, BTC was valued at $41,107, with a market capitalization of $805.8 billion. This drop represents a 3.5% decrease over the past 24 hours.
The current price of Bitcoin at $41,107 marks a one-month low, as the cryptocurrency was last valued at $40,893 on December 18, 2023.
The cryptocurrency market reflected similar losses, declining by 3.7% within 24 hours. Other major assets also faced declines: Avalanche (AVAX) fell by 7.8%, Solana (SOL) decreased by 7.4%, Cardano (ADA) was down 4.8%, Ethereum (ETH) dropped by 2.6%, and XRP saw a decline of 3.4%.
GBTC outflows, investor sentiment at play
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While the reasons behind BTC’s recent losses remain unclear, some factors are likely linked to outflows or redemptions impacting Grayscale’s GBTC ETF.
On January 18, Bloomberg ETF analyst Eric Balchunas shared data indicating that nine spot Bitcoin funds have recorded $2.8 billion in inflows thus far, but this influx is counterbalanced by GBTC’s $1.6 billion outflows, resulting in a net inflow of $1.2 billion overall.
Balchunas noted that spot Bitcoin ETFs are gradually “growing beyond GBTC bleeds.” However, any Bitcoin redeemed from GBTC that stays in circulation increases the supply available in the market, potentially influencing prices.
Investor sentiment and activity—specifically, waning interest in Bitcoin following the initial excitement surrounding ETFs—may also affect market dynamics. Bryce Elder, a journalist for the Financial Times, referred to GBTC outflows as a “neater explanation” while recognizing the possible influence of investor behavior. He stated:
“Bitcoin’s [downward price] slide is inconvenient for crypto promoters who said spot ETFs would be crypto’s watershed moment, though they have plenty of tradfi-proven excuses: profit taking, better to travel than arrive, buy the rumour sell the news, etc.”
Recent developments related to Bitcoin and the broader crypto landscape may have also influenced investor sentiment. Significant occurrences over the last day include VanEck’s announcement to discontinue its Bitcoin futures ETF and Donald Trump’s stance against central bank digital currencies (CBDC).
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