Are Bitcoin ETFs Causing Sell-Offs? BTC Declines by $1.5K Following Europe’s Initial Spot Launch

Europe witnessed the introduction of its inaugural spot Bitcoin ETF on Tuesday, but it quickly became a sell-the-news scenario as the cryptocurrency’s value dropped in the subsequent days to multi-month lows.

Interestingly, a similar occurrence transpired in 2021 following the debut of futures Bitcoin ETFs in the United States, prompting speculation about whether these products are genuinely advantageous for the crypto sector.

BTC Declines After First European ETF

Trading under the ticker BCOIN, the Jacobi FT Wilshire Bitcoin ETF was launched earlier this week on the Euronext Amsterdam exchange, signifying the introduction of the first spot BTC exchange-traded fund within the European Union.

Additionally, the two organizations behind it – Jacobi Asset Management and Wilshire Indexes – asserted that the ETF features a “verifiable built-in Renewable Energy Certificate (REC) solution which enables institutional investors to enjoy the benefits of Bitcoin while also fulfilling ESG objectives.”

This product emerged at a time when the term “spot Bitcoin ETF” is particularly prominent, leading to expectations that its launch would be perceived as a significantly positive development for the entire sector.

ADVERTISEMENT

However, this has not been the case, at least for now. Rather than a hype-fueled price surge, BTC’s price movement has been rather disappointing, with the asset declining by approximately $1,500 since its weekly high of $29,700 (on Bitstamp).

Furthermore, bitcoin fell to $28,300 earlier on August 17, reaching its lowest price point in nearly two months.

Not The First

The year 2021 was arguably the most optimistic and favorable period for bitcoin in recent history, as the cryptocurrency frequently reached new heights, culminating in an all-time high of $69,000 in November. Notably, that ATH occurred just weeks after the introduction of the first BTC-related exchange-traded fund in the United States, although it was a futures product.

What followed, however, was not as bullish as anticipated. Instead of progressing toward $100,000 as many in the community had hoped (recall the laser eyes?), BTC fell by around $20,000 by the year’s end. Less than a month later, the asset had dropped to $33,000.

This decline occurred prior to the onset of the war in Ukraine, the collapse of Terra, the ensuing bankruptcies, and the FTX crisis that unfolded later that year, all of which further contributed to BTC’s downward trajectory.

So perhaps the BTC ETFs are not as beneficial for the industry as once thought? Or maybe their adverse effects are merely temporary.

Nonetheless, it would be intriguing to observe what might transpire with BTC and the broader market if the SEC ultimately decides to approve a spot Bitcoin ETF in the United States. According to the agency’s latest statements on the issue, however, that approval would not occur until 2024 at the earliest, as it postponed making a final determination on the recent applications.

SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.