- Bitcoin’s price dropped a lot and is now trading for less than $39,000 because many people are selling in the market.
- Changes in ETFs and how the market is reacting to them.
Bitcoin’s value went down below $39,000 on Tuesday morning because people were selling their ETF shares. The cryptocurrency is now worth $38,927, which is 4. 3% less than yesterday and 9% less than last week, according to CoinGecko.
Bitcoin is dropping a lot in value.
The decrease in Bitcoin’s value caused ORDI and SATS tokens to lose 12% and 16% of their value since Monday. These tokens are linked to Ordinals, which are digital assets recorded on a satoshi – the smallest unit of BTC. Rewritten: These tokens are connected to digital assets called Ordinals, which are recorded on a satoshi, the smallest unit of BTC. The tokens were made because of a Bitcoin network change called Taproot. Other popular cryptocurrencies also experienced the effects of the slow market. Solana (SOL) went down 9%, and Optimism (OP) and Avalanche (AVAX) both lost 10% in value from the day before.
One reason for the decrease is the selling of stocks after the ETF. The Grayscale Bitcoin Trust (GBTC) had $28 billion in assets on January 10, but by Tuesday morning, $6 billion was taken out. This made it hard for investors to get their money back quickly. But after it became a Bitcoin ETF, the restrictions on holding shares for a certain period of time were no longer a problem.
As people sold their GBTC shares, Grayscale started selling the assets it held, which caused prices to go down. This situation made the value of all cryptocurrencies around the world drop to $1. 65 trillion This is the lowest it has been all year. Surprisingly, while GBTC has faced difficulties, other Bitcoin ETFs introduced earlier this month have been doing well. The iShares Bitcoin Trust (IBIT), which is managed by BlackRock, collected more than $1 billion in assets in just one week.
The changes in ETFs and how the market is reacting
Right now, the IBIT fund has $1. 3 billion in assets, according to iShares. Basically, changing from GBTC’s closed-end fund to a spot Bitcoin ETF has caused different outcomes. “GBTC had to sell Bitcoin because people were taking their money out, but other funds like IBIT are getting a lot of new investors and money. ” This has played a part in how Bitcoin investments are changing, showing that how funds are set up and how easy it is for investors to get in can make a big difference in what happens in the market.
It is important to know that the overall cryptocurrency market is not only affected by how well Bitcoin is doing. Different types of tokens and alternative coins have their own special characteristics and uses. This makes the market more complicated. The changing prices of ORDI, SATS, Solana, Optimism, and Avalanche show how connected the cryptocurrency system is. As the market changes because of rules and approvals, like when the SEC approved 11 new ETFs for trading, investors carefully watch for opportunities and risks.
The changing way people invest in cryptocurrency and the increasing variety of assets available makes it harder to predict how the market will act. The problems Bitcoin and some ETFs are having show how fast things can change in the cryptocurrency market. One fund changed to a Bitcoin ETF and many people sold their investment, but other funds attracted a lot of new money because of the change. As the market changes due to rules and what investors think, the strength and flexibility of the cryptocurrency system become important.
Warning: This is not advice for trading.