Bitcoin fell below $40,000 for the first time since January 11, when 11 spot bitcoin exchange-traded funds were introduced.
Bitcoin hit a seven-week low on Monday, falling below $40,000 for the first time since the introduction of 11 spot bitcoin exchange-traded funds on January 11.
The world’s largest cryptocurrency fell 3.98% to $39,938.00, its lowest level since December 4, following a brief comeback. The second-largest cryptocurrency, Ether, was down 6.37% to $2,328.30.
Bitcoin had surged on mounting speculation that the U.S. Securities and Exchange Commission (SEC) would authorize bitcoin ETFs, exposing the cryptocurrency to a rush of new investors. Bitcoin has increased by roughly 70% since August, when a federal court ordered the SEC to reconsider its decision to reject Grayscale Investments’ bitcoin ETF application.
Some analysts predicted that bitcoin would initially pare back some of its gains.
Other market experts warned on Monday that bitcoin was struggling to compete with traditional stocks after the S&P 500 benchmark index (.SPX) hit new highs on Monday, led by semiconductors and other tech sectors.
“It feels like bitcoin investors are running up a descending escalator right now as traditional financial benchmarks enjoy the easier ride to record highs,” said Antoni Trenchev, co-founder of crypto lender Nexo.
He added that past important crypto events, such as Coinbase’s initial public offering (COIN.O) and the debut of bitcoin futures, were followed by similar bitcoin slumps.
According to Trenchev, bitcoin was also pushed by outflows from Grayscale Investments’ bitcoin trust, which was transformed into an ETF when the SEC authorized the other bitcoin ETF products earlier this month.
On Monday, it was reported that FTX, which declared bankruptcy in 2022, sold 22 million shares for around $1 billion in the ETF.
“Spot Bitcoin ETFs are at risk of joining the crypto hall of infamy,” Trenchev said.
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