Bitcoin falls to US$40,000, lowest level since Bitcoin ETF launch

NEW YORK – Bitcoin fell to a seven-week low on Jan 22, trading below US$40,000 (S$53,680) for the first time since the launch of eleven spot bitcoin exchange-traded funds on Jan 11.

The world’s largest cryptocurrency quickly recovered, and was last down 3.39 per cent at US$40,181, trading at its lowest since Dec 4. Ether, the second largest cryptocurrency, was down 5.75 per cent at US$2,343.55.

Bitcoin’s fall follows a run-up in the token on growing excitement the US Securities and Exchange Commission (SEC) would approve Bitcoin ETFs, opening up the cryptocurrency to a slew of new investors. Bitcoin gained around 70 per cent from August, when a federal court forced the SEC to review its decision to reject Grayscale Investment’s Bitcoin ETF application.

Some analysts said they had expected Bitcoin to initially pare some of those gains.

Other market-watchers said on Jan 22 that the cryptocurrency was having a tough time competing with traditional stocks after the S&P500 benchmark notched fresh record highs on Jan 22.

“It feels like Bitcoin investors are running up a descending escalator right now as traditional financial benchmarks enjoy the easier ride to record highs,” said Mr Antoni Trenchev, co-founder of crypto lender Nexo.

He noted previous major crypto events, including the initial public offering of crypto exchange Coinbase and the launch of bitcoin futures, were followed by similar bitcoin slumps.

“Spot Bitcoin ETFs are in danger of joining the… crypto hall of infamy,” he said. REUTERS

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