While some are predicting a big move higher in the price of Bitcoin following the approval of eleven Bitcoin ETFs, volatility in the price of BTC is the story today.
At this moment, Bitcoin is now trading at around $43,000 after tanking to under $42K. Last week, Bitcoin almost hit $49,000. If anything, Bitcoin is consistent in its rapid price changes.
A report from Finequia (CSE:FNQ) provides some additional insight into the trading of Bitcoin. Analyst Matteo Greco says that the daily volume of all crypto on centralized exchanges over a 7-day period, from the 8th to the 14th of January, nearly reached $50 billion, marking the highest figure recorded since November 2022. Spot Bitcoin recorded a daily volume of $17.8 billion, a 26% increase from the $14.1 billion recorded in the preceding week, and Ethereum (ETH) generated a total daily volume of $7.7 billion during the same period, signifying an 83% increase from the $4.2 billion recorded in the prior week.
Greco attributes much of this activity on buying the rumor and selling the news – pretty standard in equity markets.
While the drop in price will disappoint holders, he says this pattern is a common occurrence and does not signify a failure in the ETF launch. In the initial two days of trading, the 11 Bitcoin Spot ETFs there was a cumulative inflow of approximately $1.4 billion, partially offset by a $600 million outflow from Grayscale Bitcoin ETF (GBTC). The net inflow totaled around $800 million.
Greco said investors were fleeing GBTC due to its higher fees – something Grayscale was pretty confident about at the time of its Bitcoin ETF launch. I wonder what they are thinking today and whether, or not, they will enter the race to the bottom on fees to better compete.