Bitcoin Breaches $40K; FTX Dumps Grayscale ETF Worth $1 Bn
By Laxmikant Khanvilkar
Virtual digital assets (VDA) recent performance underlines the vulnerability of high risk assets to fast changing investor sentiment and more importantly and the informed traders exploiting what is known as “FOMO” factor effectively.
Bitcoin (BTC) price breached below the psychologically important level of $40,000 for the first time since December as selling continues to overwhelm buying despite sizable inflows into the new spot exchange-traded funds.
The largest cryptocurrency by market capitalisation has lost nearly 20% since launch spot BTC ETFs. It is currently trading 4.3% lower at $39,832.
Bitcoin is now at its weakest price since the beginning of December, but still more than a double from year-ago levels.
Interestingly, the spot BTC ETFs are witnessing strong inflow with two – BlackRock and Fidelity topping more than $1 billion in assets under management (AUM) in the week since opening for business. However, the multi-billion dollar outflow from Grayscale’s GBTC product suggests that the investors have taken profits or move to other lower-cost vehicles.
The markets are now trying to find bottom amid favourable news flow.
For now, bitcoin is driving broader markets lower.
Ethereum (ETH), the second largest cryptocurrency, slipped toward $2,300 level. It was recently changing hands at $2,334 losing 5.6%.
Other large altcoins such as BNB, Solana, Cardano, XRP too suffered from the liquidation pressure.
The global crypto market cap decreased 4.4% to $1.57 trillion in the last 24 hours. On the other hand, the total crypto market volume jumped 131.7% to $69.9 billion. Total volume in DeFi is currently $5.6 billion, and all stablecoins are $64.4 billion, representing 7.9% and 92.1%, respectively, of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 49.8%, showing an increase of 0.01% over the day.
The IC15 index, the barometer of the top fifteen tokens, slumped 4.5% to 52,038.
Meanwhile, investors have sold more than $2 billion worth of the Grayscale Bitcoin Trust (GBTC) since it was converted into an exchange-traded fund earlier this month. A large chunk of that exodus was FTX’s bankruptcy estate dumping 22 million shares, according to private data CoinDesk.
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