Bitcoin Dips Below $41K Amidst 'Sell the Bitcoin ETF News'

• Bitcoin's Decline Continues, Dropping To Monthly Low
• The Impact of Newly Approved Bitcoin ETFs
• Global Bitcoin Products Overview
• The Effects of GBTC Exits and Other Movements
• The Role of ProShares Bitcoin Strategy ETF (BITO)

Bitcoin's Decline Continues, Dropping To Monthly Low

Bitcoin$42,260 -0.64%'s value experienced another dip of 4.5% on Thursday, reaching a monthly low of $40,800. This slump is in line with the Source 20 Index, a tracking tool for the largest and most liquid cryptocurrencies globally, which has also decreased by 4.6% over the past day.

The Impact of Newly Approved Bitcoin ETFs

Trading of the recently approved spot Bitcoin ETFs began on January 11th. Despite a transient spike, Bitcoin has seen a reduction in value of around 13%. In the first week of action alone, issuers of the new spot ETFs accumulated over 68,000 Bitcoin. Contrastingly, Grayscale's GBTC has lost approximately 40,000 Bitcoin. This results in a net addition of around 28,000 Bitcoin to ETFs.

Global Bitcoin Products Overview

Vetle Lunde, a research analyst at K33, reported that numerous spot Bitcoin products were already available globally long before US regulatory approval was obtained. He noted that exchange-traded products (ETPs) worldwide now hold in excess of 864,000 Bitcoin, shedding light on the relatively small addition of U.S. vehicles.

The Effects of GBTC Exits and Other Movements

In addition to the Bitcoin shedding by GBTC, Canadian and European ETPs have also experienced notable outflows in the past week. Investors have been taking profits and transferring funds into the comparatively cheaper US ETFs, according to Lunde.

The Role of ProShares Bitcoin Strategy ETF (BITO)

The ProShares Bitcoin Strategy ETF (BITO), recently boasting more than $2 billion in assets under management, is also worth noting. Though this futures-based ETF does not hold any Bitcoin, it represents 36% of the Bitcoin contract open interest on the CME Group's exchange. Combined, futures-based Bitcoin ETFs account for 48% of all Bitcoin open interest at the CME, as per Lunde. He also suggested that as BITO and other futures-based funds see outflows, they are likely to close (sell) their long positions in the futures market, possibly exerting additional downward pressure on Bitcoin prices.

Edited by Jonathan Stoker