Bitcoin’s downward decline began on Tuesday, when the price fell below $39,000.
The world’s largest cryptocurrency fell 2.5% to $39,163.22 on Tuesday (Jan. 23), the lowest level since December. The cryptocurrency had already dropped 4% the day before, when it briefly went below $40,000, a first this year.
According to the story, which cites FactSet data, this loss is more than 20% lower than the previous record of $49,048 set when the Securities and Exchange Commission (SEC) approved bitcoin exchange-traded funds (ETFs) on Jan. 10.
According to CNBC, analysts attribute the short-term selling pressure to withdrawals from the Grayscale Bitcoin Trust (GBTC), which has had about $2 billion in outflows since Friday (Jan. 19).
Other bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, have seen inflows over $1 billion, offsetting GBTC outflows.
According to Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank, the outflow from GBTC should have little impact because the $1.2 billion inflow into other ETFs has already offset the outflow. However, the large daily withdrawals from GBTC appear to be impacting the market psychologically.
