- BlackRock’s Bitcoin ETF has attracted over $1 billion in its first week, setting a record for crypto ETFs.
- Despite the ETF’s success, Bitcoin’s price has fallen 12% since the ETFs launched a week ago. The hype likely boosted price before launch.
- The ETF launch represents a milestone for institutional adoption, though it hasn’t directly increased Bitcoin’s price yet. The market hopes to attract more inflows going forward.
Bitcoin’s price has dropped significantly after the launch of the first Bitcoin ETFs on Wall Street. Here’s an analysis of why this may be happening and what it means for the crypto market.
BlackRock’s Bitcoin ETF Breaks Records
The Bitcoin ETF launched by BlackRock, the world’s largest asset manager, has attracted over $1 billion in its first week. This makes it the first spot crypto ETF to hit this milestone. BlackRock says this reflects strong investor demand and is just the beginning.
Bitcoin Price Down 12% Since ETF Launches
In contrast to the ETF’s success, Bitcoin’s price has fallen by over 12% since the first Bitcoin ETFs began trading a week ago. Bitcoin hit nearly $49,000 when the ETFs launched, but has now dropped below $41,000.
Why the Price Discrepancy?
Some analysts suggest the ETF launch was already priced into Bitcoin, meaning traders bought in anticipation and sold once it went live. The hype around an SEC approval likely boosted Bitcoin’s price in prior weeks and months. Now that the ETFs are here, some investors may be cashing out returns.
Impact on the Broader Crypto Market
Bitcoin often leads movements in the overall crypto market, and altcoins are down alongside it. Ethereum has fallen nearly 3% and Solana over 6% in the last 24 hours. However, Solana is still up 300% since October, a reminder that long-term prospects remain strong.
The Road Ahead
While the ETF launch hasn’t directly translated to a higher Bitcoin price, it represents a milestone in crypto’s adoption by institutional investors. With this infrastructure now in place, the crypto market hopes to attract significant new capital inflows going forward.