Bitcoin slips to nearly retest $40K even as tech stocks roar – Blockworks


Spot ETFs were anticlimactic for bitcoin’s price but ether holders likely aren’t complaining
Bitcoin’s price has struggled since spot ETFs launched in the US earlier this month, having now given up practically all price gains made since the start of December.
Bitcoin was on its way to retesting $40,000 early Monday morning after sinking almost 5% over the past five days. 
BTC almost hit $49,000 as ETFs backed by the cryptocurrency opened trade on Jan. 11 — which converts to a near-20% retracement since that point. BTC is still up 80% over the past year.
BlackRock, Fidelity and Bitwise and six other issuers have been accumulating bitcoin on behalf of ETF shareholders over that time, with the former first to reach $1 billion in assets under management last week. Fidelity’s fund quickly followed.
Grayscale meanwhile has seen $2.8 billion in bitcoin flow out from its Bitcoin Trust (GBTC), with its comparatively high fees believed to blame. 
Previously, GBTC was a closed-ended fund through which shares could not be redeemed for bitcoin. The firm won a key SEC court battle late last year, setting GBTC to be converted into an open-ended spot ETF along with all the others. 
That meant capital potentially locked up for years could finally be pulled and reallocated without selling GBTC shares (while its NAV discount has now all but dried up). Bitcoin’s sagging price could be related to GBTC outflows and subsequent sales, although the exact impact is difficult to know for certain.
Read more: Bitcoin at $31K as court formalizes Grayscale win over SEC
GBTC first launched in 2015 and its head start means GBTC is by far the biggest ETF by assets under management, even after the billions in outflows, with $23.55 billion in the fund as of Friday’s close.
Overall, spot bitcoin ETFs in the US have seen about $1.15 billion in net flows over their six trading sessions. 
The latest figures shared by Bloomberg analyst Eric Balchunas show that spot ETFs without counting GBTC hold 95,300 BTC ($3.87 billion) — less than half a percent of the circulating supply. 
GBTC meanwhile holds almost seven times that amount. Altogether, US spot ETFs account for 3.3% of the supply, about one third of the bitcoin sitting with crypto exchange hot wallets, per CryptoQuant data.
While bitcoin has floundered over the past few weeks, markets appear to have gravitated towards ether (ETH) in anticipation over its own suite of spot ETF applications. 
Read more: After spot bitcoin ETF approval, eyes shift to ether fund decision
ETH is up nearly 1.5% over the year to date, after gaining as much as 11%. Other major cryptocurrencies including solana (SOL) and XRP have meanwhile dropped 20% and 16% while BNB is about flat.
The sudden attention paid to ether even knocked its 20-day correlation with bitcoin into rare negative territory for the first time in almost three years.
Still, practically the entire crypto market is in the red today and looks primed for consolidation, especially considering the health of the S&P 500 and the tech-heavy Nasdaq so far this year. 
The bitcoin halving sometime in April is the next anticipated potential catalyst for crypto volatility.
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