The market price of Bitcoin, which has been approved for ETFs, has plummeted by more than 20%. Contrary to the market’s expectation that investment will be concentrated, sales of supplies continued due to “the disappearance of good news.”
According to Reuters and others, the price of Bitcoin, a cryptocurrency, was traded around $38,900 on average on the 23rd (local time), plunging more than 20% from this month’s high of $49,000. When the approval of the spot ETF was announced earlier this month, about $4 billion in investment was concentrated, and the price of Bitcoin reached a three-year high, but in three weeks, a large amount of sales have poured back into the market, causing the market to fall.
In particular, the Grayscale Fund, which led Bitcoin’s ETF approval, sold about $2.8 billion worth of Bitcoin, contributing significantly to the decline in the market price. In addition, FTX, a bankrupt cryptocurrency trading company, also lowered its price by pouring out sales.
Doublock, a virtual asset magazine, said, “As the price of Bitcoin has fallen below $40,000, the possibility of further market adjustment has increased,” adding, “The speed of bitcoin sales will be faster, especially for short-term investors who are sensitive to price fluctuations.”
However, some predict that the market price of Bitcoin will surge again after the half-life scheduled for April 18 this year. The half-life of Bitcoin refers to the time when Bitcoin’s mining compensation, which is limited to 21 million issuance, is halved. As the amount of bitcoin excavated approaches the total amount, the reward for excavation gradually decreases, and the price of bitcoin rises.
The market predicted that Bitcoin will rise again when it combines the half-life of Bitcoin with the time of interest rate cuts. Bitcoin has seen its price soar every four years in the coming half-life. In May 2020, the most recent half-life, it recorded a 27% price increase for 150 days.