Since the US Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs (exchange-traded funds), the price of BTC has seen a sharp decline.
Nevertheless, the ETFs have attracted many investors, resulting in record trading volume within the first two days of trading.
Bitcoin ETFs record record trading volumes
Available data shows that spot Bitcoin ETFs collectively achieved a significant trading volume of around $8 billion. Volume peaked at about $4.6 billion on the opening day, followed by volume of over $3 billion on the second day of trading.
Grayscale’s GBTC ETF proved to be the most actively traded spot Bitcoin ETF during this period. Impressively, the company recorded a total trading volume of over $4 billion, cementing its position at the top of the market.
Spot trading volume of Bitcoin ETFs. Source: Bloomberg
New issuers such as BlackRock, Fidelity, Bitwise and others also saw significant trading activity over the days. In particular, BlackRock CEO Larry Fink praised the early success, adding that he views the top cryptocurrency as an asset class rather than a currency.
However, some analysts argued that these early trading activities were a flop as most came from Grayscale outflows. However, Bloomberg analyst Jeremy Seyffart countered that such arguments were “clickbait” based on “God-candle expectations that had nothing to do with reality.”
“We kept talking about how much money would flow into these things from other Bitcoin and crypto-related exposures. And we kept talking about the longer-term implications of what these could create as a bridge. “Anything that talks about this being a flop or terrible is either click bait or it just created 'god candle' expectations that weren't in line with reality,” Seyffart added.
BTC price is falling due to selling pressure
Amid the increased trading activity, Grayscale transferred 4,000 BTC worth $183 million to Coinbase. This transaction, carried out in four batches of 1,000 BTC each, took place on Coinbase Prime, a key participant in the recently launched Bitcoin ETFs.
It is worth highlighting that Coinbase acts as a broker and custodian for Grayscale. Therefore, these BTC transfers may be a deposit derived from the sale of the Grayscale ETF.
Read more: Has Bitcoin reached a market peak? Smart Whale sold 2,742 BTC
Grayscale transfers to Coinbase Prime. Source: Arkham Intelligence
Additionally, on-chain analyst JA Maartunn noted the potential for more sell orders in the Bitcoin market. He noted that two sell orders of 1,900 BTC were positioned to trigger at specific price points. The first is 894 BTC at $44,000 and another 1,071 BTC when the asset reaches $45,100.
“There is currently strong selling pressure for an extended period, which may have peaked. It is possible that the price will start to revert to the mean at this point,” explained crypto analyst Maartunn.
These transactions had a significant impact on the price of BTC. At press time, Bitcoin fell more than 7% to below $42,000 and then recovered to $42,781.
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