By nearly all metrics, spot bitcoin ETFs have been off to a great start. And yet, the launch of these much anticipated products is tanking the price of the industry’s leading asset. Since Jan. 10, the day the U.S. Securities and Exchange Commission (SEC) approved the roster of exchange-traded funds, bitcoin (BTC) is down about 15%.
What was widely regarded to be the most bullish event in recent crypto history, with the possibility of drawing in millions of new bitcoin investors and potentially billions in capital, may actually — at least temporarily — be cooling bitcoin’s jets.
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This is largely due to the billions of dollars exiting GBTC, which transitioned to an ETF from a closed-ended trust, meaning investors are finally able to pull their capital out. Grayscale has seen more than $3 billion in redemptions, only some of which is flowing into other bitcoin ETFs that charge much lower fees than GBTC’s 1.5%.
See also: Bitcoin ETF Flows Show Negative Trend For First Time Since Launch
On social media, noted VC Chris Burniske said bitcoin has yet to bottom out, giving a price prediction as low as $20,000, in an echo of a recent Deutsche Bank survey that found one-in-three respondents saying the largest cryptocurrency could dip below $20,000 by year’s end.
Just 15% of Deutsche’s 2,000 survey takers across the U.S., U.K. and E.U. said they expect bitcoin’s price to stabilize between $40,000 and $75,000 by year-end.
Is this negative sentiment around bitcoin warranted? Burniske apparently doesn’t see many positive advancements in the near term, not even mentioning the upcoming bitcoin halving (expected in April) that many other market onlookers are hoping will buoy bitcoin.
“New product innovations are close, but not quite there yet … things still feel insular,” Burniske wrote, adding that “precarious” macroeconomic factors will likely continue to press on bitcoin.
It’s hard to say exactly what will happen, but it’s also difficult to see many long-term headwinds working against bitcoin. In terms of regulation, it seems like the worst of it is behind the industry now that Binance settled charges with…
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