Bitcoin ETF Day 8 Update: Market Rebound Signals Bottom As Grayscale Selling Slows Down
January 24 2024 - 10:00PM
NEWSBTC
Since the approval of Bitcoin ETF applications by the US Securities
and Exchange Commission (SEC) on January 11, followed by the
commencement of trading a day later, the ETF race has witnessed
impressive trading volumes on each trading day. As the market
recovers from a sharp correction, recent developments indicate a
notable slowdown in Grayscale selling, which could potentially
signal a rebound for the Bitcoin price following the recent 20%
drop. Market expert James Mullarney and Bloomberg ETF expert Erich
Balchunas provide key insights into Bitcoin ETF fund flows after 8
days, shedding light on the evolving dynamics and investor
sentiments surrounding this development. Hope For Bitcoin
Bulls One of the key observations made by James Mullarney is
the deceleration in Grayscale’s selling activities. While Grayscale
continues to sell, the pace of their selling has significantly
reduced, indicating a potential shift in their strategy. This
is seen as a positive sign for the market, as a slowdown in
Grayscale selling could contribute to stabilizing Bitcoin prices
and restoring investor confidence. Related Reading: Analysts Reveal
Next Steps As Solana Corrects Hard After 1000% Rally Amidst this
backdrop, major players in the asset management industry, such as
BlackRock and Fidelity, have showcased their resilience and
commitment to Bitcoin. BlackRock, one of the world’s largest
asset managers, currently holds 44,000 BTC in assets under
management (AUM), indicating their growing exposure to the
cryptocurrency. Similarly, Bitcoin ETF issuer Fidelity,
renowned for its digital asset services, stands strong with 40,000
BTC AUM, demonstrating their continued confidence in Bitcoin and
its long-term potential. Moreover, the dynamics of the recent
sell-off are noteworthy. The majority of the selling pressure
observed in the market involved FTX, which completed day 8 of
trading. However, as the market enters day 9, the expectation
is for a significant reduction in selling pressure from FTX and
Grayscale, potentially contributing to a more stable market
environment, according to Mullarney. The emergence of Bitcoin
ETFs as significant holders of the cryptocurrency is another
positive aspect to consider. ETFs have not only absorbed the
101,600 BTC sold by Grayscale but have also increased their
holdings by an additional 21,100 BTC in just 8 days.
According to Mullarney, this indicates growing institutional
interest in Bitcoin, as ETFs continue to accumulate significant
amounts of the cryptocurrency. Bitcoin ETF Issuers Counter
Grayscale Selling Despite Grasycale’s selling spree, Mullarney
highlights that the Bitcoin ETF managers alone are acquiring 15
times the daily Bitcoin supply, surpassing 13,444 BTC against the
900 BTC daily creation rate. This notable inflow of BTC
demonstrates the strong demand from institutional investors and
highlights the potential impact of ETFs on the overall Bitcoin
market. Interestingly, the new ETFs have absorbed a net total
of 122,000 BTC in just 8 days, overcoming the impact of Grayscale’s
release and contributing to a positive net inflow. Related Reading:
Shiba Inu Team Teases ‘Next Big Thing’ As ‘Big Money’ Eyes SHIB
Bloomberg ETF expert Erich Balchunas adds further insights to the
analysis. Balchunas notes that the volume of Grayscale Bitcoin
Trust (GBTC) has decreased, which could be a sign of exhaustion in
selling. However, $515 million was withdrawn from GBTC
yesterday, resulting in a total outflow of $3.96 billion since its
conversion to an ETF. On a more positive note, there was a net
inflow of $409 million on the ninth day, indicating renewed
investor interest. Featured image from Shutterstock, chart from
TradingView.com
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