Bitcoin experienced a decline to a seven-week low, dropping below $40,000 for the first time since the launch of 11 spot bitcoin exchange-traded funds (ETFs) on January 11.
The world’s largest cryptocurrency was down 3.98% at $39,938.00, marking its lowest point since December 4. This comes after a period of excitement regarding the potential approval of bitcoin ETFs by the US Securities and Exchange Commission (SEC).
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Bitcoin had rallied about 70% since August, driven by optimism surrounding ETF approval. However, it faced challenges competing with traditional stocks, especially as the S&P 500 reached record highs on Monday.
The decline in bitcoin’s value follows the conversion of Grayscale Investment’s bitcoin trust into an ETF after the SEC approved other bitcoin ETF products earlier in the month. Some analysts expected bitcoin to pare some of its gains after the initial surge driven by ETF-related optimism.
Antoni Trenchev, co-founder of crypto lender Nexo, mentioned that bitcoin investors are facing challenges amid traditional financial benchmarks reaching record highs. Outflows from Grayscale Investment’s bitcoin trust and the sale of FTX shares in the ETF also contributed to the pressure on bitcoin’s value.
