Market interpretation and follow-up views of the Bitcoin spot ETF 5 days after its approval

Original - Odaily

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It has been 5 days since the Bitcoin spot ETF was approved, but the price of Bitcoin has not risen as expected. Instead, it has continued to fall, even falling below 42,000 USDT.

Ouyi OKX market shows that in the past 5 days, BTC fell from a minimum of 48988 USDT to 41340 USDT and then rebounded; as of press time, BTC was temporarily trading at 42636.7 USDT, a 24-hour decrease of 0.63%.

Altcoins generally saw prices rise by more than 10% after the Bitcoin ETF was approved. Among them, ETH once rose from 2450 USDT to more than 2700 USDT, and the ETH/BTC exchange rate once rose to 0.061, a new high in nearly 3 months. The community joked that SEC passed the ETH ETF. Currently, ETH has fallen back to 2530 USDT. The strength of ETH has brought the prices of Ethereum ecological OP and ARB to surge in the past week, both hitting record highs. In addition, TIA continues to strengthen and continues to hit new highs. It is currently trading at 20.1 USDT.

Coinglass data shows that the entire network liquidated $117 million in the past 24 hours, of which long orders liquidated $82.1041 million and short orders liquidated $34.5308 million; in terms of currencies, BTC liquidated $28.415 million and ETH liquidated $23.8372 million. Dollar. The current notional value of open positions in BTC options across the network is $14.05 billion, and the notional value of open positions in ETH options is $7.54 billion.

Good news + Grayscale smashes the market, the market is reshuffled

After the approval of the Bitcoin spot ETF, the price of BTC did not rise or fall. There are two reasons:

First, it is beneficial to the implementation. Starting from October 2023, spot ETFs have continued to report good news about their imminent approval, pushing the price of BTC from 27,000 USDT to a maximum of 48,988 USDT, especially after experiencing two fake news: CT fake news and SEC official recommendation was stolen , the market potential has been consumed and the upward momentum is insufficient.

The second is the sell-off of Grayscale GBTC. After Grayscale’s Bitcoin spot ETF was approved, the GBTC discount narrowed to 1.9% the day after the approval. Then Grayscale transferred 4,000 BTC to Coinbase Prime and may conduct ETF redemption activities. According to subsequent statistics, Grayscale GBTC had an outflow of nearly $579 million in two days. Increased selling pressure is one of the reasons why Bitcoin prices have fallen.

Robinhood Chief Brokerage Officer Steve Quirk commented that most GBTC sellers have invested their funds in other Bitcoin spot ETFs. Anthony Scaramucci, founder of SkyBridge Capital, believes that the decline in Bitcoin prices since the spot Bitcoin ETF was approved and began trading was partly due to the GBTC sell-off.

However, according to monitoring by crypto asset fund management company EMC Labs, Bitcoin faced the largest selling pressure in a year after the approval of the Bitcoin spot ETF. However, judging from the following relevant data, the buyers power of Bitcoin can fully bear the selling pressure of sellers, and the price of Bitcoin may turn around in the future. The following is a sample of EMC monitoring data:

• GBTC had a net outflow of US$579 million in the first two trading days, and other ETFs had a net inflow of US$819 million; the overall net inflow was US$240 million;

• From the 10th to the 12th, BTC recorded the largest single-day CEX deposit amount in 12 months for three consecutive days, with a total of more than 300,000 Bitcoins; however, the amount of withdrawals increased simultaneously in the past few days, and the final net deposit was only 16,000 Bitcoins;

• From the 13th to the 14th, the amount of BTC deposited dropped rapidly to 58,000, while the amount of withdrawals increased simultaneously, with a net outflow of 20,000 CEX Bitcoins; therefore, from the 10th to the 14th, there was a net outflow, which can be regarded as the buyer’s resistance. selling pressure;

• On CEX, a buying power of US$3.3-3.6 billion was accumulated from 10 to 14, and this buying power has not diminished. This metric is a comparison of Bitcoin/ETH net deposits/inflows and stablecoin net value on CEX;

• Stablecoin minting added $1.7 billion in the past week, adding to the $2.1 billion in the first week of January for a new $3.8 billion. The pace of external capital inflows remains at its highest level in the past 3 months.

To sum up, Bitcoin is currently in a state of washout, and sellers and buyers are making brand-new adjustments. After the adjustment, it seems that the voyage will begin.

Will the dip be the last chance to get on board?

As Bitwise chief investment officer Matt Hougan said, the market overestimates the short-term impact of Bitcoin spot ETFs, but also underestimates the long-term impact of ETFs.

The approval of a Bitcoin spot ETF does not mean that Bitcoin will immediately see a large influx of funds. It simply increases the number of purchase channels for Bitcoin and attracts people from traditional finance to participate in Bitcoin transactions more conveniently. But just two days later, nine issuers have already absorbed $1.4 billion in funds, surpassing GBTC’s $579 million outflow, for a total net inflow of $819 million. BlackRock leads the way with $500 million, followed by Fidelity.

The influx of funds and selection requires a long-term layout, and the short-term washout phenomenon is also normal. Judging from the BTC trading volume before and after approval, it has remained at 40 billion US dollars for 4 consecutive days. This means that although the price is falling, the trading volume is increasing, which means that the trading behavior in the market is gradually increasing.

Most institutions also have a positive view of the future of the crypto world.

Ophelia Snyder, president and co-founder of 21 Shares, said the impact that broader access to Bitcoin like an ETF would have on the market “cannot be underestimated.” Matrixport COO Cynthia Wu mentioned in her 2024 forecast that spot ETFs will bring $50-100 billion in new funds to the crypto market.

Coinbase said the approval of spot ETFs is a watershed moment in the expansion of the crypto economy. A variety of Bitcoin spot ETFs launched by the worlds largest asset managers will attract a diverse range of new investors, stimulating long-term growth and product innovation. At the same time, it represents the latest step in the global shift toward digital assets, helping to drive innovation in the financial system itself. Providing investors with a convenient and familiar way to access spot cryptocurrencies, the approval of the spot ETF will provide exposure to cryptocurrencies to millions of new investors and further solidify its status as a mainstream asset.

Although Bitcoin prices are facing a decline in the short term, this may also be the last chance for most people to get on board.

Odaily reminds that the market has been volatile recently, so please invest with caution and increase your risk awareness.