Bitcoin (BTC) has recently experienced a notable decline, falling below the $40,000 threshold for the first time in over a fortnight. Bitcoin, the most valuable cryptocurrency in terms of market cap, is trading at $39,847. This represents a 3.44% decrease in the last day and a 6.40% drop over the past week.
Interestingly, this downturn occurred shortly after the U.S. approved Bitcoin exchange-traded funds (ETFs). These ETFs, which let investors engage with Bitcoin without directly buying the digital currency, were initially expected to boost the market. However, the reality has been quite the opposite.
The launch of these ETFs, particularly the transformation of Grayscale’s Bitcoin Trust into a spot BTC ETF, has led to a sell-off. Previously, the Grayscale Bitcoin Trust operated similarly to a closed-end fund, limiting how investors could redeem their shares. Post-conversion, there’s been a rush to sell, causing significant Bitcoin withdrawals from the fund and applying downward pressure on its price.
The impact of this trend is not limited to Bitcoin. The wider cryptocurrency market is also struggling, with leading altcoins like Ethereum (ETH) and Solana (SOL) facing declines. Ethereum has dropped by more than 4.45% in the last 24 hours, now trading at $2,330, while Solana has decreased by 6.09%, currently valued at $84.80.
