Bitcoin, the world’s leading cryptocurrency, has witnessed a downward trend following the recent approval of the Spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC).
Prominent figures in the cryptocurrency space, such as Anthony Scaramucci, founder of SkyBridge Capital, have weighed in on the reasons behind Bitcoin’s decline, raising concerns among investors and enthusiasts.
Bitcoin’s price fluctuations
Since the SEC’s approval of the Spot Bitcoin ETF, Bitcoin has experienced a notable decline in its price. On January 10, Bitcoin was trading at around $46,000, but it quickly dropped to $44,914 on January 11.
The cryptocurrency’s value has continued to fluctuate, and as of the latest update, it stands at approximately $43,064.73. This represents a substantial decline of 6.74% in just one day, with a decrease of 1.38% over the past week and 5.13% over the last month.
Grayscale’s role in Bitcoin’s decline
One factor contributing to Bitcoin’s recent decline, as pointed out by Anthony Scaramucci, is the selling pressure exerted by Grayscale’s Bitcoin Trust (GBTC). Scaramucci noted that there has been a significant sale of Grayscale’s Bitcoin Trust shares in the market. This selling pressure may have impacted Bitcoin’s price, causing it to dip following the SEC’s ETF approval.
Another prominent catalyst for Bitcoin’s bearish trend, according to Scaramucci, is the increasing selling rate of Bitcoin on the FTX exchange. FTX, which filed for bankruptcy in 2022, still holds substantial amounts of cryptocurrencies.
Following the ETF launch, FTX began unwinding its cryptocurrency holdings. Scaramucci explained, “The second thing we are seeing is the bankruptcy estate of FTX is unloading into the ETF announcement. There is a heavy volume of sales in Bitcoin right now. I expect the supply overhang to be done in six to eight trading days.”
The historic significance of SEC’s ETF approval
Despite the recent decline in Bitcoin’s price, Anthony Scaramucci acknowledged the approval of the Spot Bitcoin ETF by the SEC as a historic moment for Bitcoin and the cryptocurrency market as a whole. This regulatory milestone was anticipated to trigger a bullish market sentiment, but the outcome has surprised many.
Scaramucci also shared insights into SkyBridge Capital’s journey in the cryptocurrency space. He mentioned that 2023 was the firm’s best year, during which they invested significantly in Bitcoin, Ethereum, and Solana. In contrast, 2022 was described as a “brutal” and the “worst” year for the firm, suggesting the challenges and volatility of the cryptocurrency market during that period.
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