After the launch of Spot Bitcoin ETFs, the excitement was dampened by a significant upper wick in BTC’s weekly chart and a reversal of ETF enthusiasm, primarily due to over $5 billion in heavy selling volumes, causing panic among investors. Despite initial high expectations for the ETFs to boost market risk appetite, BTC price dropped by approximately 7% since the ETF approval, with a weekly low of $41,753.
Bloomberg’s ETF expert Eric noted that while 500 ETFs launched in 2023 collectively reached $450 million in volume, Spot Bitcoin ETFs quadrupled this in just three days, indicating a strong start. However, half of this volume came from GBTC, which saw significant outflows as investors rushed to sell GBTC shares for ETFs, resulting in a net outflow of $1.2 billion in three days.
GBTC sold 27,122 BTC in the first four days after the market launch, which was 4.4% of its reserves, primarily through Coinbase Prime, highlighting a positive OTC demand. Despite GBTC’s sell-off, firms like BlackRock increased their holdings, with IBIT reserves rising from 2,621 to 25,067, and Spot ETFs currently holding a total of 651,819 BTC, indicating continued net inflows.
Despite the “sell the news” event and billion-dollar sales by whales pressuring BTC prices, the market remains resilient. Fidelity’s global macro director Jurrien Timmer suggests that we are witnessing a short-term position adjustment rather than a long-term trend reversal, but warns of potential price volatility in the coming weeks due to the unwinding of over 13,000 futures contracts.
Experts from VanEck and Standard Chartered express optimism for the ETFs’ trading liquidity and anticipate increased institutional investments in Bitcoin in the coming quarters. Standard Chartered projects over $50 billion in net inflows into ETFs throughout the year, which could potentially push BTC prices to new all-time highs.
