KEY POINTS
- Bitcoin (BTC) witnessed a further 4.5% decline, plummeting to a one-month low at $40,800
- This decline comes in the wake of the recent approval and commencement of trading for spot Bitcoin ETFs on Jan. 11
- As of 6:15 a.m. ET on Friday, Bitcoin was trading at $41,419.78
Despite notable inflows into Bitcoin exchange-traded funds (ETFs) during the previous four trading sessions, Bitcoin (BTC), the global crypto leader in market capitalization, experienced a notable downturn, descending to its lowest valuation since mid-December 2023 and breaching the critical $41,000 price threshold.
On Thursday, Bitcoin (BTC) witnessed a further 4.5% decline, plummeting to a one-month low at $40,800.
This decline comes in the wake of the recent approval and commencement of trading for spot Bitcoin ETFs on Jan. 11, marking a noticeable drop of approximately 13% in its value, following a brief, albeit modest, initial surge.
Over the weekend, Bitcoin managed to regain some lost ground but remained below the $43,000 mark for several consecutive days. Following this atypical period of limited price movement, bearish sentiment regained momentum in the past 24 hours, leading to another notable downward spiral.
The cryptocurrency's market capitalization contracted to $810 billion, accompanied by a notable decline in its dominance over alternative cryptocurrencies, which now stands well below the 50% threshold.
The altcoin landscape is currently grappling with a sea of red, as most charts are dominated by bearish sentiment.
Ethereum experienced a 2.5% decline, trading below the $2,500 mark after maintaining a position above it for several weeks.
Similarly, a host of other prominent altcoins, including Ripple, Cardano, Dogecoin, Polkadot, Tron, Chainlink, Toncoin and Polygon, have seen declines ranging from 1% to 5% in the same period.
In a single day, the combined market capitalization of all cryptocurrencies witnessed a significant decrease of $50 billion, now standing at $1.630 trillion according to CoinMarketCap.
But what is the reason behind Bitcoin's descent in value?
Analyst Vetle Lunde of K33 Research offered a global perspective and underlined that even before the SEC's approval of spot Bitcoin ETFs in the U.S., multiple spot Bitcoin products were already actively traded worldwide.
She detailed that the current collective holdings in these global Bitcoin investments surpassed 864,000 Bitcoins, which places the recent influx of U.S. investments in a relatively modest light.
"Bitcoin ETPs globally currently hold 864,719 BTC. That's equal to 4.4% of BTC's circulating supply and roughly 45% of the size of crypto exchange reserves. ETFs are a huge part of Bitcoin's market structure, impacting both spot markets and the CME - and its relevancy is due to grow further," the analyst's tweet read.
Bitcoin ETPs globally currently hold 864,719 BTC.
— Vetle Lunde (@VetleLunde) January 17, 2024
That's equal to 4.4% of BTC's circulating supply and roughly 45% of the size of crypto exchange reserves.
ETFs are a huge part of Bitcoin's market structure, impacting both spot markets and the CME - and its relevancy is due to… pic.twitter.com/OtLSQN6aN6
Furthermore, alongside the exodus from Grayscale's GBTC, individuals in other parts of the world also divested from their Bitcoin holdings last week.
As of 6:15 a.m. ET on Friday, Bitcoin was trading at $41,419.78 with a 24-hour volume of $26,911,094,028.
The crypto asset's latest price action represents a 2.42% dip in its value on the day and a 10.18% loss in the last seven days.
Bitcoin's current circulating supply stands at 19,602,475 BTC while its market cap is at $811,740,626,003, data from CoinMarketCap showed.
