Bitcoin Hits $49K Amidst ETF Trading Frenzy, Then Dips

• Bitcoin Crosses $49,000 Amid Launch of US Bitcoin ETFs
• Cryptocurrency Stocks Respond to Bitcoin ETFs
• Impact of Bitcoin ETFs on Market Volatility

Bitcoin Crosses $49,000 Amid Launch of US Bitcoin ETFs

Bitcoin$42,260 -0.64% (BTC) experienced a momentary surge, reaching above $49,000 on Thursday for the first time since December 2021. This surge coincided with the trading initiation of U.S.-listed bitcoin exchange-traded funds (ETF). The increased anticipation surrounding the commencement caused the leading cryptocurrency asset to rally from slightly under $46,000 to over $47,000, before peaking at $49,042 during the early U.S. trading session, as indicated by data from The source Indices.

However, BTC soon relinquished its gains, plunging back below $46,000. Nonetheless, the cryptocurrency remained 1% higher over a 24-hour period, with trades slightly above $46,000.

Cryptocurrency Stocks Respond to Bitcoin ETFs

As Bitcoin experienced fluctuation, stocks with a focus on cryptocurrency, like Coinbase (COIN), also saw a decline. Despite promising pre-market gains, COIN's value fell by 5% following the commencement of trading. Bitcoin miners such as Marathon Digital (MARA) and Riot Platforms (RIOT) also suffered, with losses exceeding 10%.

Mizuho Securities, who assigned an underperform rating to Coinbase shares and a $54 price target, described the ETF approval as a pyrrhic victory for COIN. They suggested that potential revenue increases linked to Bitcoin ETFs might be less impactful than anticipated.

Impact of Bitcoin ETFs on Market Volatility

The highly anticipated launch of the eleven Bitcoin ETFs led to substantial volatility in the asset's price. Market watchers closely monitored the level of interest these new funds would generate by the close of the day.

Among the new ETFs, BlackRock's IBIT has been leading in terms of trading volume, with $500 million by 10:50 U.S. Eastern Time, as reported by BitMex Research. Grayscale's GBTC, the world's largest Bitcoin investment fund that transitioned from a closed-end fund to an ETF, posted over $700 million in trading volumes within the first hour of trading.

Edited by Jonathan Stoker