(Bloomberg) — Bitcoin posted its worst price in about a month as fanfare over new U.S. exchange funds for the largest digital asset faded.
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The token fluctuated between gains and losses, trading little changed at $42,655 as of 1:42 p.m. in Singapore on Monday. It had been declining for three days through Sunday, the longest such losing streak since mid-December. Smaller crypto coins were mixed, with Ether declining in second place and BNB gaining.
The group of nearly a dozen ETFs, including from investment giants BlackRock Inc. and Fidelity Investments, began trading on Jan. 11. Bitcoin briefly reached a two-peak high of over $49,000 after launch, but then began to fall.
The rise and rapid downward move have the hallmarks of a buy-the-rumor-sell-the-facts reaction that some market watchers had expected, Tony Sycamore, market analyst at IG Australia Pty, wrote in a note. Based on chart pattern signals for Bitcoin, he sees a possible decline to $38,000-$40,000.
Proponents of Bitcoin's controversial role as a store of value claim that the first U.S. spot ETFs for Token Herald have increased investor access to the cryptocurrency. Skeptics point to the severe crypto crash in 2022 and subsequent bankruptcies as reasons for caution over wider adoption despite a partial market recovery last year.
Read more: Bitcoin ETFs take Wall Street by storm with historic debut
Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, said in a post on the social media site that included $500 million for BlackRock's iShares Bitcoin Trust and $422 million for the Fidelity Wise Origin Bitcoin Fund .
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The $26 billion Grayscale Bitcoin Trust – the largest fund of its kind – saw outflows of $579 million after converting to an ETF last week, Balchunas said. The fund previously had a closed-end structure and traded at a discount to its underlying holdings last year, prompting some to bet the gap would narrow.
That speculators are taking profits on this trade after the discount has all but disappeared may be one of the reasons for Bitcoin's recent weakness, wrote Noelle Acheson, author of the newsletter “Crypto Is Macro Now.”
“It is very unlikely that all outflows from the Grayscale Bitcoin Trust went back into Bitcoin,” she said. “The new funds should continue to see strong inflows over the next week as money is funneled in on the sidelines and the marketing machines get going. This could be offset by further outflows in the near term as speculative positions are unwound.”
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