Bitcoin Plummets to $41K Amidst Dwindling ETF Hype and GBTC Outflows

By: Eliza Bennet

As the hype around the initiation of Bitcoin's first spot ETFs subsides, Bitcoin (BTC) suffered significant losses on January 18. The crypto currency touched $41,107, marking a 3.5% dip in the span of 24 hours. This value presents a one-month low, mirroring Bitcoin's December 18, 2023, price.

Although the reasons behind Bitcoin's current drawback remain unclear, some ties could be traced back to the outflows affecting Grayscale's GBTC ETF. This phenomenon, paired with a potential decrease in investor interest since the initial ETF excitement, likely contributes to the current market conditions.

Sizable GBTC outflows coincide with a wave of net inflows into Bitcoin's spot ETFs. However, these inflows are still offset by GBTC's $1.6 billion outflows, resulting in an overall $1.2 billion of inflows. Despite these trends, spot Bitcoin ETFs are slowly expanding beyond GBTC's reach.

Other factors potentially affecting investor sentiment include some of the recent pivotal events concerning Bitcoin, such as VanEck's decision to terminate its Bitcoin futures ETF and Donald Trump's expressed aversion to central bank digital currencies (CBDC).