Bitcoin Slides Back Towards $41,000 as ETF Approval Becomes a Painful Sell-The-News Event ⋆ ZyCrypto

The price of Bitcoin (BTC) fell on Friday, erasing gains made in the previous days. Today's decline comes amid increased market volatility after the US Securities and Exchange Commission approved in-demand spot BTC exchange-traded funds (ETFs).

Are traders selling the news after the hype?

Bitcoin takes a 7% nosedive

Bitcoin appeared to be aiming to reach $49,000 again on Thursday, but the recovery was staved off by a BTC correction.

The world's largest cryptocurrency with a market cap of $836 billion is currently changing hands for $42,653 apiece. According to data from CoinGecko, the current trading price is 38.18% below its all-time high of $69,044 in November 2021.

According to CoinGlass, around $91 million worth of Bitcoin positions were cleared from futures markets in the last 24 hours, including $75 million worth of long positions and around $16 million worth of short positions .

The Bitcoin price correction confirms the bears’ theory that a “sell-the-news” scenario is occurring following the release of the spot Bitcoin exchange-traded funds on January 10th.

After a decade of repeated denials, the Securities and Exchange Commission finally gave its blessing to nearly a dozen spot Bitcoin ETFs, a groundbreaking development that experts say marks Bitcoin's official integration into the global economy. These spot ETFs offer traditional retail and institutional investors an easy way to gain direct exposure to the oldest and largest cryptocurrency without having to deal with crypto exchanges or wallets.

Spot ETFs are causing a stir

Wall Street giant BlackRock reignited interest in Bitcoin in June 2023 during the crypto winter when it sought SEC permission to launch its iShares Bitcoin Trust (IBIT) due to customer demand for such a financial product. Shortly after, the SEC received over 13 more ETF applications and the price of BTC skyrocketed.

Spot Bitcoin ETFs started off with a bang, with the newly launched products generating $4.6 billion in net assets on day one.

Industry observers now believe that the SEC's approval may have opened the door for the approval of other crypto-based spot ETFs, such as a spot Ether ETF. Bloomberg senior ETF analyst Eric Balchunas is 70% confident that an ETH spot ETF will launch by May.

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