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Investors are recording losses linked to spot Bitcoin ETFs, BTC price has fallen below $41,800, and the Fear and Greed Index has dropped to “neutral.”
Bitcoin’s Fear and Greed Index fell by 24 points over two days, settling at 52 points in “neutral” territory, its lowest level since October 19, 2023. The decline in the “greed” metric occurred just two days after the approval of spot Bitcoin ETFs. Overall enthusiasm surrounding the launch of these new investment products has significantly diminished.
Within two days of the launch, net inflows into spot Bitcoin ETFs totaled approximately $1.4 billion, according to data published by Bloomberg analyst Eric Balchunas. In total, about 500,000 transactions were executed for $3.6 billion involving the new exchange-traded funds. These figures include both inflows and outflows but exclude transactions still awaiting settlement.
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The largest outflow of funds was recorded from the Grayscale Bitcoin Trust (GBTC), amounting to approximately $579 million. According to Anthony Scaramucci, founder of SkyBridge Capital, this outflow is driven by GBTC holders recording losses and moving to options with lower fees.
In terms of fund inflows, the leading performers were:
- BlackRock (IBTC) — $497.7 million;
- Fidelity (FBTC) — $422.3 million;
- Bitwise (BITC) — $237.9 million.
The decline in general hype surrounding spot Bitcoin ETFs, combined with trading volatility, contributed to a drop in BTC’s price, which dipped below $41,800. As of 12:00 (GMT+2) on January 15, 2024, its value was around $42,700, according to CoinGecko. Meanwhile, the decline in price has caused confusion among users. According to Google Trends, searches for “Why is Bitcoin dropping?” surged by 1,100% over two days as market participants sought reasons for the current price movement.
On January 11, the U.S. Securities and Exchange Commission (SEC) approved the issuance of spot Bitcoin ETFs. The following day, 11 exchange-traded funds began trading on three exchanges. On the first day, the trading volume for these new investment instruments exceeded $4.5 billion, and BTC briefly rose to $48,800.
