Despite the recent challenges, SkyBridge’s founder and managing partner, Anthony Scaramucci, expressed optimism about Bitcoin’s future.
The price of Bitcoin (BTC), the world’s largest cryptocurrency, experienced a notable drop below $41,000 early this morning, marking a continuation of its recent slide. The dip follows the approval of multiple spot Bitcoin Exchange-Traded Funds (ETFs) in the United States earlier this month.
While the cryptocurrency has shown a slight recovery at the time of writing, trading at around $40,600, it is still down by 2.7% for the day and 3.7% over the past week, according to CoinGecko data.
Bitcoin Price in Sell-Off Situation
One of the primary factors contributing to the recent drop in Bitcoin’s value is believed to be the mass exodus of investors cashing out their gains following the approval of US spot Bitcoin ETFs. The Grayscale Bitcoin Trust (GBTC) has been particularly affected, as investors exit their positions in response to its conversion into a spot Bitcoin ETF.
Before the conversion, GBTC shares were restricted to accredited investors, and a mandatory 6-month lockup period was in place after the purchase of these shares. The conversion allowed investors to redeem their GBTC shares for Bitcoin, leading to a substantial outflow of more than $2.2 billion from the fund in the last week. Grayscale responded by moving hundreds of millions of dollars in Bitcoin to its custodian Coinbase Global Inc (NASDAQ: COIN) for liquidation.
The outflows from Grayscale have added selling pressure on Bitcoin, contributing to its decline over the two weeks since the approval of US spot Bitcoin ETFs. Despite Bitcoin ETFs amassing 95,000 BTC and achieving an AUM of over $4 billion, the market has experienced downward pressure, causing a 1.6% drop in Bitcoin’s value in the past day.
Analysts argue that the approval of Bitcoin ETFs was “priced in”, indicating that the market had already factored in the positive development. This sentiment led to a phenomenon known as “selling the news”, where investors opted to cash in on their positions following the anticipated approval, resulting in a lack of sustained gains for Bitcoin.
The decline in Bitcoin’s price has mirrored a broader trend in the crypto market, with a 2.7% drop in the overall market cap to $1.68 trillion. The global crypto market cap had initially surged to $1.86 trillion the day after the SEC approved 11 spot Bitcoin ETFs for trading. Among the top 10 cryptocurrencies by market cap, Solana and Cardano have experienced the most remarkable declines, dropping 5.5% and 4.9%, respectively, over the past day.
Optimism Amidst Challenges
Despite the recent challenges, SkyBridge’s founder and managing partner Anthony Scaramucci expressed optimism about Bitcoin’s future.
He believes that Bitcoin’s price could surpass $170,000 by mid-to-late 2025, attributing this potential surge to the upcoming Bitcoin halving scheduled for April. Scaramucci believes that if Bitcoin is around $45,000 during the halving, multiplying this figure by four would provide a projected price for the top coin within the next 18 months.