Bitcoin Falls Below $69,000 as Grayscale Transfers Over $400 Million in BTC to Coinbase
Bitcoin suffered a setback today, falling well below its new all-time high to below $69,000 per coin.
The largest digital coin by market cap has since recovered and is back above $70,000 at the time of writing. However, according to CoinGecko, it is well below the $73,700 mark reached yesterday.
Thanks to the enormous success of the new spot Bitcoin exchange-traded funds (ETFs), Bitcoin has experienced a resurgence. But then data from the Labor Department's Bureau of Labor Statistics came out Thursday showing the producer price index rose 0.6% last month.
The key inflation indicator showed prices were higher than expected in February. Traders interpreted this data as a sign that the Federal Reserve might not cut interest rates in May, leading to a sell-off in digital assets and stocks.
Another possible factor? About $400 million in Bitcoin was transferred from Grayscale to its custodian Coinbase, data from Arkham Intelligence showed today.
“I think the inflation narrative is playing a role, but there may also be more Grayscale sales than usual – but we won't know for sure until tomorrow,” he said.
In January, the fund manager divested itself of a huge amount of digital coins and transferred $2.2 billion to the exchange in just a few days. This resulted in downward pressure on the price.
James Butterfill, head of research at Coinshares, told Decrypt that both developments are factors.
Now that it is an ETF, investors were keen to redeem their holdings and take home profits. It's likely they'll do it again.
Despite the Grayscale redemptions, net inflows to the nine other ETFs traded topped $1 billion on Tuesday, a record.
Edited by Ryan Ozawa.
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