Peak upon listing? Bitcoin ETFs face consecutive sell-offs, with FTX leading the way by selling $1 billion

"Buy the rumor, sell the fact." Bitcoin spot ETFs have been sold off, with billions of dollars flowing out.

On Monday, Bitcoin continued its decline since the listing of its spot ETF, with an intraday drop of 5.5%, reaching $39,461 and falling below the important $40,000 mark for the first time since December last year. It then rebounded slightly, rising above $40,000. Prior to this, the pricing in the options market indicated support around $40,000, which is a major psychological level.

Since the approval of Bitcoin spot ETFs, funds have flowed into related funds issued by companies such as BlackRock, but at the same time, billions of dollars worth of Bitcoin have been withdrawn from the Grayscale Bitcoin Trust (GBTC). Among them, FTX has sold 22 million shares of GBTC, a large portion of which is capital outflow, amounting to nearly $1 billion. Currently, FTX's ownership of GBTC has dropped to zero.

Like many large cryptocurrency trading entities, FTX takes advantage of the difference between the price of Grayscale Trust shares and the net value of the underlying Bitcoin assets in the fund. According to documents submitted on November 3, 2023, as of October 25, 2023, FTX held 22.3 million GBTC, worth $597 million.

Approved by the U.S. Securities and Exchange Commission (SEC) on January 10, the first batch of spot Bitcoin ETFs began trading on January 11. Among them, Grayscale was approved to convert its GBTC into an ETF, becoming the world's largest Bitcoin spot ETF with assets under management exceeding $18.6 billion.

Is listing the peak? Bitcoin has shown a typical "sell the fact" trend. On January 11, Bitcoin briefly rose above $49,000, reaching a new high since December 2021, with an intraday increase of about 6.8%. However, the enthusiasm quickly faded, and Bitcoin fell back below $46,000 on the same day. Calculated from the lowest price of $39,500 during Monday's intraday trading, Bitcoin has fallen by 20% and entered a technical bear market.

If we look at the performance since the approval on January 10, Ethereum has outperformed Bitcoin. Bitcoin has fallen by 14% since then, while Ethereum has still achieved a 3% increase.

Peter Schiff, a well-known financial commentator in the United States, said:

All spot Bitcoin ETFs are now in a bear market, defined as a decline of 20% or more from the peak. The largest decline is FBTC, down 32%.

Defiance ETF CEO and CIO Sylvia Jablonski said, "The recent movement of Bitcoin is completely expected. This appears to be a sell-the-fact pullback before we see cryptocurrencies resume their bullish trajectory."

Technical analysts have also warned that while the long-term upward trend of Bitcoin remains intact, there may be further downside. Bitcoin could potentially drop to $36,000, although this level may not be sustained for long.