The price of Bitcoin (BTC) fell another 4.5% on Thursday, falling to its lowest price in a month at $40,800. The decline was roughly in line with the CoinDesk 20 Index, which tracks the world's largest and most liquid cryptocurrencies, and is down 4.6% in the last 24 hours.
Since the newly approved spot Bitcoin ETFs began trading on January 11th, the Bitcoin price has now fallen by around 13% – after a very brief increase.
Looking at data updated yesterday, new spot ETF issuers added more than 68,000 Bitcoin in their first week of action. However, Grayscale's GBTC lost about 40,000 Bitcoin, leaving the Bitcoin ETFs with a net gain of about 28,000.
Vetle Lunde, research analyst at K33, said that numerous spot Bitcoin products were already trading around the world long before US regulatory approval. In fact, he said, exchange-traded products (ETPs) worldwide currently hold more than 864,000 bitcoins, putting into perspective the relatively small increase in U.S. vehicles to date.
Lunde noted that Canadian and European ETPs saw significant outflows last week, in addition to the GBTC exits, as investors took profits and/or moved money into the cheaper US ETFs.
And then there's the ProShares Bitcoin Strategy ETF (BITO), which recently managed more than $2 billion in assets. According to Lunde, while this futures-based ETF did not hold Bitcoin, it accounted for 36% of open Bitcoin contracts on the CME Group exchange. Collectively, futures-based Bitcoin ETFs account for 48% of all open Bitcoin interest on CME, he added.
As BITO and the other futures-based funds experience outflows, Lunde says they will need to close (sell) their long positions in the futures market, potentially putting further pressure on Bitcoin prices.
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