Bitcoin Drops Below $40,000 for the First Time Since Bitcoin ETF Launch

By Trisha Andrada

Jan 23, 2024 08:18 AM EST

Bitcoin dropped to a seven-week low on Monday, lingering below $40,000 for the first time since the 11 spot bitcoin exchange-traded funds (ETF) rolled out earlier this month.

According to Reuters, the value of the biggest cryptocurrency in the world declined by 3.98% to $39,938.00, marking its lowest trading point since December 4 last year. Ether, the world's second-largest crypto, was trading at $2,328.30, down 6.37%.

Vital Topic and Subjective Information of Bitcoin
(Photo : Muhammad Asyfaul via Unsplash)

Bitcoin Having Trouble Competing With Traditional Stocks 

A rising number of people were optimistic that the US Securities and Exchange Commission (SEC) would give its approval to bitcoin ETFs, which would make the cryptocurrency accessible to a large number of new investors. 

Since last August, when a federal judge ordered the SEC to reconsider its decision to deny Grayscale Investment's application for a bitcoin ETF, the price of bitcoin has increased by almost 70%.

Some market analysts said they had anticipated that bitcoin would first see some of those gains reversed. Others said the digital coin had trouble competing with traditional stocks after the S&P 500 benchmark index hit fresh record highs Monday, propelled by semiconductor and other tech stocks.

READ ALSO: Coinbase Eyeing to Expand Crypto Derivatives in EU With MiFID II Licensed Company

Bitcoin vs. Traditional Stocks

Antoni Trenchev, co-founder of crypto lender Nexo, said, "It feels like bitcoin investors are running up a descending escalator right now as traditional financial benchmarks enjoy the easier ride to record highs."

It was brought to his attention that prior significant cryptocurrency events, such as the introduction of bitcoin futures and the initial public offering of crypto exchange Coinbase, for example, were followed by comparable declines in the value of bitcoin.

Trenchev noted that the withdrawals from Grayscale Investment's bitcoin trust, which was transformed into an ETF after the SEC authorized the other bitcoin ETF products earlier this month, were another factor that contributed to the pressure applied to bitcoin.

As reported by CoinDesk on Monday, FTX, which filed for bankruptcy in 2022, has sold 22 million ETF shares valued at nearly $1 billion.

"Spot bitcoin ETFs are in danger of joining the ... crypto hall of infamy," Trenchev added.

READ MORE: US SEC Approves Spot Bitcoin ETFs a Day After Its 'Hacked' X Account Prematurely Shared Such News

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