In recent weeks, Bitcoin and the overall crypto market have experienced a whirlwind of events. Starting with the excitement over the introduction of spot Bitcoin ETFs in the US, followed by a cooling down of prices and the occurrence of the Golden Cross, investors are now uncertain about what comes next for the top crypto.
Bitcoin’s Recent Dip, Experts Insight
Amidst the recent downturn in Bitcoin’s price, Ki Young Ju, the CEO of CryptoQuant, has provided insights into the current situation, aiming to debunk concerns surrounding Grayscale’s Bitcoin Trust (GBTC). Despite the market turbulence since the introduction of Spot Bitcoin ETFs this month, Ju notes that the primary cause behind the dip is not the selling pressure from GBTC but rather the selling activities in the derivative market.
Getting to the specifics, he suggests that investors should mirror institutional strategies, highlighting that BTC’s decline is not directly correlated with GBTC movements. Instead, he points to the derivative market as the key factor influencing the current market conditions. He notes that active Over-the-Counter (OTC) markets show no significant impact on prices. This implies that a bullish trend may begin when on-chain OTC and spot ETF activities decrease, signaling a re-accumulation phase.
Hence, despite concerns about GBTC sales, crypto market specialist Fred Krueger recommends monitoring BTC into new ETFs as a more trustworthy performance measure. He compares GBTC worries to whales selling BTC and predicts long-term profits for BlackRock, Fidelity, and Bitwise.
Adding to the positive sentiment, Samson Mow anticipates that Bitcoin’s demand from various sources, including individuals, corporations, nation-states, and ETFs, will surpass any selling pressure. Mow tells everyone involved in the market to be logical and focus on the math behind it instead of getting upset when prices change quickly.
Is BTC Influx into New ETFs the Real KPI?
Grayscale has played a big part in the crypto space, but its recent problems, like FTX’s $1 billion GBTC selloff because of worries about bankruptcy, have threatened market stability. Although eleven U.S. Spot Bitcoin ETFs were approved by the Securities and Exchange Commission (SEC) initially boosting confidence, the market is still under pressure from Grayscale’s lower trading volume compared to rivals and large GBTC outflows.
The road ahead remains uncertain as the dust has still not settled in the crypto space. The SEC’s approval brought temporary optimism, but the crypto community struggles with the aftermath of Grayscale’s troubles, with some critics labeling GBTC as a “gigantic wrecking ball of toxic waste.”
Despite these challenges, there has been a partial recovery in Bitcoin’s price as of January 24, with the cryptocurrency trading at $40,000.06. This marks a 2.55% surge from the previous day’s low of $39,105.51, indicating a tentative return of investor confidence in the market.