Bitcoin (BTC) investors who made unpopular bets were proven right when the long-awaited approval of a spot exchange-traded fund (ETF) ended up causing a drop in price. Analysts had warned that this could happen because the price of the token had gone up quickly in recent months.
“Sell the news” is a phrase used in markets to describe how prices of things like stocks and investments go up when there is good news, but then quickly go down again.
Bitcoin went down to $41,500 on Monday, but then went back up again after reaching a high of over $49,000. This happened because the first ever spot bitcoin ETFs were introduced in the U. S began trading on Thursday last week.
The US has given the green light for spot bitcoin ETFs. The event was highly anticipated and had a good price, so the experts at the Japanese crypto exchange bitBank think it will probably cause the price to go up for a little while.
Bitcoin might have some people selling it to make money in the near future, but because of lower interest rates in the US, it could still be a good investment. “The market thinks the Fed will lower interest rates soon, so any potential problems with that may not be too bad. ”
BitBank thinks that the $40,000 level is a good amount to support bitcoin prices in the short term. In another place, experts at 10x Research, led by Markus Thielen, said in a note on Monday that they think prices will stop dropping at around $38,000.
Alex Kuptsikevich, a market analyst at FxPro, said in an email on Monday that bitcoin could drop to $40,000, which is a normal thing for its price to do after going up so much.
In simple terms, many people still believe that the value of bitcoin will go up in the long term because there is a lot of interest in exchange-traded funds (ETFs) and big investors are buying a lot of bitcoin.
Henry Robinson, founder of a company called Decimal Digital Group, said that Bitcoin ETFs will make a big change in the industry. They will allow more people to invest in Bitcoin through traditional wealth management. This means that pension funds, endowments, insurance companies, and other organizations will be able to invest in Bitcoin.
However, despite the excitement of ETF launches, we believe they do not have any advantage over keeping custody of your investments yourself. The fees will take a big chunk of money from people who hold onto their investment for a long time. “It might be a long time, but we think fewer people will want ETFs as more people start using bitcoin and institutions start keeping their own bitcoin,” Robinson said.