Bitcoin has fallen almost 20% since the Jan. 11 launch of the first exchange-traded funds investing directly in the token as speculators become more cautious about the potential impact of the products.
The digital asset spiked to $49,021 on the day the ETFs from issuers including BlackRock Inc. and Fidelity Investments went live. Bitcoin traded at $39,990 as of 6:03 a.m. Tuesday in London, an 18% drop from that intraday peak.
Nine new US spot Bitcoin funds started trading on Jan. 11, while the $22 billion Grayscale Bitcoin Trust — or GBTC — converted from a closed-ended structure into an ETF. A net $1.2 billion flowed into the group in the first six days, Bloomberg Intelligence’s Senior ETF Analyst Eric Balchunas wrote on X.
BlackRock’s iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund garnered most of the influx, while $2.8 billion exited the Grayscale fund, Balchunas said. Among the sellers was the estate of bankrupt crypto exchange FTX, which disposed of the majority of its shares in the Grayscale vehicle.
“Over the past two weeks, Bitcoin has been challenged by tougher macro conditions — evidenced by rallying rates and a strengthening dollar — and significant selling pressure from traders unwinding their GBTC arbitrage positions along with the FTX bankruptcy estate offloading assets,” Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors LLC, wrote in a note.
The disposals by FTX potentially remove a supply overhang, suggesting that the “intense selling pressure from GBTC may soon subside,” Farrell added.
Bitcoin surged almost 160% last year, outperforming traditional assets such as stocks, amid speculation that the ETFs would catalyze wider adoption of the cryptocurrency by institutional and individual investors. The token has been retreating since the turn of the year and trailing global markets.
Tokens such as Ether and BNB were little changed in Asia on Tuesday along with Bitcoin, the largest digital asset, which is roughly $30,000 below its 2021 pandemic-era record of almost $69,000.
“GBTC outflows have created a dynamic in the market that needs to be normalized before we will see true price discovery,” said Leah Wald, chief executive officer of digital asset investment firm Valkyrie Investments.
Elsewhere, Wells Fargo Advisors adds a $400 million Morgan Stanley veteran in Naples as an ex-Cetera advisor goes independent with LPL
According to a federal charges Bradley Heppner, 60, received more than $150 million in payments through funneling money from GWG Holdings to a shell company.
A $1B fund allegedly skimmed 30% off the top, then swapped cash for locked-up stock.
Insiders allegedly rewrote projections three times in four days.
TCI Wealth Advisors also has also tapped JIFFYAI to unify onboarding and servicing, while TradePMR adds ICE market data to its Fusion advisor platform
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
