Bitcoin (CRYPTO: BTC) flattered only to deceive. The big surge that many investors expected following the spot Bitcoin exchange-traded fund approval did not materialize and the apex crypto has been on a downtrend since topping just under $49,000 a day after the approval.
A fund manager on Saturday warned that the apex crypto could be headed much lower in the days to come.
What Happened: Bitcoin will likely give up much of its 184% gain it made over the past year, said Future Fund Managing Partner Gary Black. The analyst attributed his bleak outlook to expected institutional interest not materializing and famed investors such as Warren Buffett as well as financial industry veterans such as JPMorgan’s Jamie Dimon warning against Bitcoin’s lack of intrinsic value.
After the first week of the launch of 11 new spot Bitcoin ETFs, these funds saw a relatively modest $1 billion net inflows or $3.3 billion in gross inflows, far less than what Bitcoin bulls were modeling. This is excluding the $2.3 billion in net outflows from the Grayscale Bitcoin Trust (NYSE:GBTC) ETF, which charges a higher fees, he said, adding that GBTC charges 1.5% per annum compared to 0.2%-0.4% fees for the others.
“We’ve seen this move before: After #BTC’s monster 2020-2021 move fueled by Fed QE, #BTC plunged -77% from its $67.7K high in Nov 2021 to a $15.6K low in Nov 2022,” Black noted.
“A similar drawdown would take #BTC to around $12K.”
As #btc and other crypto currencies continue to sell the news (-12% from its peak) following the SEC’s approval of 11 spot #btc ETFs, we expect #btc to give up much of its +184% gain over the past year as expected institutional interest fails to materialize, and as other famed… pic.twitter.com/p44YyX7p6M
— Gary Black (@garyblack00) January 20, 2024
See Also: How To Buy Bitcoin (BTC)
Why It’s Important: The spot Bitcoin ETF launch proved to be a “buy-the-rumor, sell-the-news” event. The pullback was in line with the risk aversion seen in the financial markets in January following 2023’s strong performances.
Bitcoin, for one, rallied about 155% in 2023 and was among the best-performing financial assets of the year.
Also, crypto analysts and investors expected fund flows out of Grayscale Bitcoin Trust (NYSE:GBTC) to be plowed into cheaper spot Bitcoin ETFs,…
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