Bitcoin plummets to below US$40 000

Lowest since ETF launch
Market-watchers say the cryptocurrency was having trouble competing with traditional stocks after the S&P 500 benchmark index opens new tab notched fresh record highs.
  • 3 Months Ago - 2024-01-24 00:00:00
Bitcoin fell to a seven-week low on Monday, hovering below US$40 000 for the first time since the launch of 11 spot bitcoin exchange-traded funds on 11 January this year.
The world's largest cryptocurrency was last down 3.98% at US$39 938.00, trading at its lowest since 4 December last year after a brief recovery. Ether, the second largest cryptocurrency, was down 6.37% at US$2 328.30.
Bitcoin had rallied on growing excitement the US Securities and Exchange Commission (SEC) would approve bitcoin ETFs, opening up the cryptocurrency to a slew of new investors.
Bitcoin gained around 70% from August, when a federal court forced the SEC to review its decision to reject Grayscale Investment's bitcoin ETF application.
Some analysts said they had expected bitcoin to initially pare some of those gains.

Competition
Other market-watchers said on Monday the cryptocurrency was having trouble competing with traditional stocks after the S&P 500 benchmark index opens new tab notched fresh record highs on Monday driven by semiconductor and other tech stocks.
"It feels like bitcoin investors are running up a descending escalator right now as traditional financial benchmarks enjoy the easier ride to record highs," said Antoni Trenchev, co-founder of crypto lender Nexo.
He noted previous major crypto events, including the initial public offering of crypto exchange Coinbase, opens new tab and the launch of bitcoin futures, were followed by similar bitcoin slumps.
Trenchev said bitcoin was also pressured by outflows from Grayscale Investment's bitcoin trust, which was converted into an ETF when the SEC approved the other bitcoin ETF products earlier this month.
CoinDesk reported on Monday that FTX, which entered bankruptcy in 2022, has sold 22 million shares worth close to US$1 billion in the ETF.
"Spot bitcoin ETFs are in danger of joining the ... crypto hall of infamy," Trenchev said. - Reuters