The spot Bitcoin ETF euphoria quickly turned into a severe pullback as the old market adage ‘buy the rumor, sell the news’ played out by the book.
The price of Bitcoin BTCUSD has declined 20% since January 11 when US regulators approved 11 spot Bitcoin ETFs that are now offered by America’s biggest asset managers. The drop washed out roughly $200 billion from Bitcoin’s market cap as the price brushed against $38,400 per token, down from $49,000 on the day the ETFs went live.
After the classic market adage ‘buy the rumor, sell the news’ played out by the book, cryptoland sentiment improved and shot the token’s price to levels around $40,000. The notable softening in demand for crypto products triggered a wave of outflows across the ETF issuers. Grayscale, for one, was knocked by $2.2 billion in withdrawal requests.
Across the crypto spectrum, other big coins were also nursing losses after a string of bruising trading sessions. Ethereum ETHUSD, the second-largest token, is down about 18% since the monumental ETF launch. And Solana SOLUSD, the ultra-fast blockchain, is lower by 24%, moving from $108 to around $80 for the same time span.