Bitcoin appears to be showing signs of recovery following a weekend decline that led to a broader sell-off in the crypto market.
The crypto asset reached a peak of $49,000 after the US Securities and Exchange Commission (SEC) approved over ten spot Bitcoin ETF applications on Wednesday, January 10, 2024. However, it experienced a notable drop to $41,500 by Friday. The latest TradingView data shows that Bitcoin is trading around $42,666 at press time.
Speculations surrounding the Friday decline
The surge in Bitcoin’s price by 60% following the SEC’s approval of spot Bitcoin ETPs contributed to the overall market rally. However, experts believe Friday’s price decline could be attributed to two significant factors.
The first reason was that the price surge of Bitcoin had a considerable positive impact on the portfolios of investors globally, who withdrew their profits following the surge. The second factor pointed out was that the decline in the market value of the crypto asset is a result of the crypto market’s volatility and unpredictability.
Some analysts also point to the macroeconomic factors and the influence of Grayscale Bitcoin Trust Shares in the market.
Grayscale Bitcoin Trust Shares and its Influence on Bitcoin’s Friday Price
Grayscale Trust Bitcoin Shares (GBTC) has been in the industry since 2013 set a record for the largest first-day turnover for an exchange-traded fund (ETF) in the finance industry on Thursday, January 11. Some stakeholders, including SkyBridge Capital founder Anthony Scaramucci, experts have linked the recent decline in Bitcoin’s price to the massive sell-off of GBT Shares
Scaramucci explained in an interview with Bloomberg TV on Friday that “there appears to be a lot of selling of Grayscale.” He further noted that holders of the shares were selling off to book losses and transitioning to lower-fee alternatives.
However, Zach Pandl, Grayscale’s head of research, argued that selling one Bitcoin product for another should not significantly impact the cryptocurrency’s price.
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