Bitcoin ETF

Bitcoin

Spot

James

The flagship cryptocurrency, Bitcoin, <a href="https://bitcoinist.com/bitcoin-how-low-will-btc-crawl-before-its-return/">recently dropped below $40,000</a>. This continues the <a href="https://www.newsbtc.com/news/bitcoin/bitcoin-price-fall-below-41000/#:~:text=A%20sell%20pressure%20of%20such,pressure%20was%20pushing%20prices%20down." rel="nofollow noopener" target="_blank">crypto token’s decline</a>, which began around the time the <a href="https://bitcoinist.com/breaking-spot-bitcoin-etfs-approved-by-us-sec/">Spot Bitcoin ETFs were approved</a>. Interestingly, a recent development indicates that the defunct crypto exchange FTX has greatly contributed to this price dump.&nbsp; 
<h2 id="why-bitcoin-dropped-below-40-000">Why Bitcoin Dropped Below $40,000</h2> 
According to a Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-01-22/ftx-estate-sold-majority-of-exchange-s-grayscale-bitcoin-trust-holdings-gbtc?utm_source=twitter&amp;utm_medium=social&amp;utm_campaign=socialflow-organic&amp;utm_content=crypto" rel="nofollow noopener" target="_blank">report</a>, FTX sold off a majority of its shares in <a href="https://bitcoinist.com/breaking-grayscale-scores-victory-against-us-sec-spot-bitcoin-etf-imminent/">Grayecale’s Bitcoin Trust (GBTC)</a> after the Bitcoin ETF conversion. This means that it has partly contributed to Grayscale’s unending BTC sales in a bid to fulfill these redemptions. Grayscale’s move in the market is believed to be the reason why Bitcoin’s price has continued to plummet.&nbsp; 
NewsBTC had <a href="https://www.newsbtc.com/news/bitcoin/bitcoin-price-fall-below-41000/#:~:text=A%20sell%20pressure%20of%20such,pressure%20was%20pushing%20prices%20down." rel="nofollow noopener" target="_blank">previously reported</a> how GBTC experienced outflows of over $2 billion in just five days after it began trading as a Spot Bitcoin ETF. Now, this trend looks to have been spearheaded by FTX as a sale of all their GBTC holdings <a href="https://bitcoinist.com/ftx-sheds-nearly-1-billion-in-grayscale-bitcoin-etf/">amounts to almost $1 billion</a>, according to recent reports.&nbsp; 
Just like every other GBTC investor, FTX is believed to have been taking profits, considering that the fund was trading at a <a href="https://bitcoinist.com/gbtc-bitcoin-reaches-largest-discount-ever/">discount from BTC</a> right until the Bitcoin ETF conversion. Moreover, FTX would have liquidated its GBTC holdings sooner rather than later, considering that it is in the process of <a href="https://bitcoinist.com/ftx-repayment-plan-bitcoin-valued-at-16000/">repaying all its customers</a>.&nbsp; 
FTX’s sister company, Alameda Research has also been busy in the market as of late, possibly in a bid to also contribute to FTX’s repayment plan. NewsBTC <a href="https://www.newsbtc.com/crypto/crypto-ftx-celsius-matic-eth-wbtc/#:~:text=On%2Dchain%20data%20shows%20that,and%201150%20ETH%20to%20Wintermute." rel="nofollow noopener" target="_blank">had reported</a> that the trading firm moved significant portions of its crypto holdings to Binance, suggesting that an imminent sell-off was on the horizon.&nbsp; 
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://www.tradingview.com/x/ydJ1wqKe/" alt="Bitcoin price chart from Tradingview.com" width="3266" height="1530"> 
<h2 id="things-could-still-get-worse">Things Could Still Get Worse</h2> 
<a href="https://bitcoinist.com/xrp-etf-approved-in-2024/">Bloomberg analyst James Seyffart</a> recently <a href="https://x.com/JSeyff/status/1749634659145630055?s=20" rel="nofollow" target="_blank">revealed</a> that the outflows from Grayscale’s GBTC don’t look to be slowing down. GBTC is said to have recorded over $640 million in outflows on January 22. This figure represents its largest outflow in a single day, with a total of $3.45 billion out of the fund so far.&nbsp; 
If this trend continues, it could further have a negative impact on <a href="https://www.newsbtc.com/news/bitcoin/bitcoin-to-reach-1-million/#:~:text=Bitcoin's%20Rise%20To%20%241%20Million%20To%20Happen%20%E2%80%9CIn%20Days%20To%20Weeks%E2%80%9D&amp;text=The%20analyst's%20bullish%20prediction%20for,traders%20to%20experience%20maximum%20loss." rel="nofollow noopener" target="_blank">BTC’s price</a> as Grayscale will have no choice but to keep offloading its BTC holdings on the market. Since GBTC started trading as a Spot Bitcoin ETF, the asset manager <a href="https://x.com/lookonchain/status/1749451186061873158?s=20" rel="nofollow" target="_blank">has deposited</a> over 63,900 BTC into <a href="https://bitcoinist.com/coinbase-70-chance-of-victory-against-sec/">Coinbase</a> and has likely dumped all these tokens on the market already.&nbsp; 
<a href="https://bitcoinist.com/ftxs-trading-arm-drops-lawsuit-against-grayscale/">Grayscale</a> still has over $21 billion <a href="https://bitcoinist.com/grayscales-total-crypto-assets-under-management-tops-60-billion/">assets under management</a> (AuM) and a <a href="https://platform.arkhamintelligence.com/explorer/entity/grayscale" rel="nofollow noopener" target="_blank">BTC holding </a>of over 573,000, meaning a selling pressure of such magnitude could be really disastrous for Bitcoin and the broader crypto market.&nbsp; 
At the time of writing, Bitcoin was trading at around $39,700, down over 3% in the last 24 hours, according to <a href="https://coinmarketcap.com/currencies/bitcoin/" rel="nofollow noopener" target="_blank">data</a> from CoinMarketCap.&nbsp;

Here’s Why The Bitcoin Price Crashed Below $40,000

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