This Week in Crypto: Bitcoin and Ethereum Plunge Despite ETF Hype
Bitcoin ETFs Witness Adoption as BTC Plummets
The crypto market is suffering ten days after the launch of the most-awaited spot Bitcoin ETF (Exchange-Traded fund). Over the last seven days, BTC’s price has dropped over 5.5%, per data on price aggregator CoinGecko. As of this writing, the largest digital currency by market capitalization is valued at $41.598. By comparison, Bitcoin almost touched $49,000 last week.
Meanwhile, most of the approved spot Bitcoin ETFs continue to witness massive success. For example, the iShares ETF, which is issued by the biggest asset manager, BlackRock, now boasts more than $1 billion in AUM (Assets Under Management).
So, why is Bitcoin declining in value despite several ETFs performing well? Analysts believe that short-term investors have been taking profits following the recent surge. Moreover, asset manager Grayscale is said to have played a part in causing Bitcoin to dip.
Grayscale Bitcoin Trust Investors Cause BTC to Dip
Investors in the firm’s Bitcoin Trust, which the United States Securities and Exchange Commission (SEC) converted to spot Bitcoin ETF ten days ago, have been selling off their positions. According to a Bloomberg report, nearly $2 billion has left Grayscale’s Bitcoin ETF over the past five days.
Ethereum, on the other hand, has shed 4.9% of its value as of this writing. It is valued at $2,471. The drop is attributed to discouraging comments made by the SEC Chair Gary Gensler in regard to spot Ethereum ETF. In a recent interview on Fox Business, Gensler said the SEC views Bitcoin as a commodity and the rest of the cryptocurrencies as securities.
Despite the SEC Chair’s comments, which some think have reduced the possibility of the commission approving spot Ethereum ETF, Bloomberg ETF analysts say there is a 70% chance of an ETF approval. On Thursday, the SEC extended the deadline for announcing its decision on the spot Ethereum ETF application filed by Fidelity to March 5. The move also caused ETH to plunge.
More Crypto Assets Decline in Value
Besides Bitcoin and Ethereum, other leading cryptocurrencies have seen their price fall sharply this week. Solana, for example, has declined by 6.3% to change hands for $93.28 at press time. Avalanche has shed 8.8% over the past seven days to trade at $32.87.
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