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2024-01-15 at 11:53 #435440
Nat Quinn
KeymasterBitcoin posted its worst streak in about a month amid ebbing fanfare over new US exchange-traded funds for the largest digital asset.
The token fell as much as 1.9% before paring some of the slide to trade at $42,239 as of 9 a.m. Monday in Singapore. It has dropped for four straight days, the worst such run since mid-December.
Smaller crypto coins struggled for much traction, with Ether, BNB and Solana posting mixed performance.
The batch of almost a dozen ETFs, including from investment titans BlackRock Inc. and Fidelity Investments, began trading on Jan. 11.
Bitcoin briefly hit a two-year high above $49,000 after they went live but then began retreating.
The spike and quick turn lower have the hallmarks of a âbuy-the-rumor, sell-the-fact reactionâ some market watchers had expected, Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note.
He sees a possible slide to $38,000 to $40,000 based on the signals from chart patterns for Bitcoin.
Supporters of Bitcoinâs contentious role as a store of value contend that the first US spot ETFs for the token herald increased investor access to the cryptocurrency.
Sceptics point to 2022âs deep crypto crash and ensuing bankruptcies as reasons for caution about wider adoption despite a partial market rebound last year.
In a post on social media site X, Bloomberg Intelligenceâs senior ETF analyst Eric Balchunas said the new US spot funds achieved a net inflow of $819 million over the first two days of trading.
That included $500 million for BlackRockâs iShares Bitcoin Trust and $422 million for the Fidelity Wise Origin Bitcoin Fund.
The $26-billion Grayscale Bitcoin Trust â the largest such fund â saw $579 million of outflows after converting into an ETF last week, Balchunas said.
The fund previously had a closed-ended structure and traded at a discount to its underlying holdings last year, spurring some to bet on the gap narrowing.
Speculators taking profits on that trade now that the discount has all but gone may be part of the reason for Bitcoinâs recent weakness, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.
âItâs very unlikely that all the outflows from the Grayscale Bitcoin Trust went back into Bitcoin,â she said.
âThe new funds are likely to continue to see strong inflows over the next week, as money on the sidelines is funneled in, and as the marketing machines get going. This could be offset short-term from more outflows as speculative positions are unwound.â
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