If you have any crypto then this article is for you, I’m going to talk in this article about why has the Value of Bitcoin Decreased Today? which I expect, and what we’re looking at for the rest of January through February and March, so stay tuned.
In the end, there is a lot to tell you and I promise it will be worth your time, let’s talk about what I have, so overall crypto is down a bit, not really a dramatic drop, This is not a devastating and depressing apocalyptic message. Despite the approval of 11 new Bitcoin ETFs, Bitcoin’s value has dropped by more than 5% in the last 24 hours.
This morning, the world’s oldest cryptocurrency is now below $45,000, after briefly rising above $48,000 when the SEC approved the ETFs. Bitcoin had struggled to surpass $45,000 for most of the past year.
Coinglass reported that nearly $70 million worth of Bitcoin was sold in the last 24 hours. This can impact Bitcoin’s price because it adds more contracts to the market, increasing supply and reducing demand.
On the other hand, Ethereum’s price has stayed around $2,600 since the approval of Bitcoin’s new ETFs. Some investors believe that if spot Bitcoin ETFs are approved, the SEC might also approve the first Ethereum ETFs in the U.S.
BlackRock’s CEO, Larry Fink, spoke positively about the idea of an Ethereum ETF in an interview with CNBC. BlackRock is one of the 11 companies whose spot Bitcoin ETF application got approved on Wednesday.
Why has the Value of Bitcoin Decreased Today?
Bitcoin’s price went up a lot when the U.S. Securities and Exchange Commission gave the green light to spot Bitcoin ETFs from 11 investment firms, like BlackRock, Wisdom Tree, and Valkyrie, on Wednesday afternoon. On Thursday, Bitcoin almost reached $49,000 before dropping back to $45,000 today.
Before this, the SEC had only approved Bitcoin futures ETFs for trading in the U.S. Some ETFs invest in companies related to cryptocurrency, like firms that work on Bitcoin mining technology.
A spot ETF follows the current price of the asset it’s based on, while a futures ETF looks at possible future prices of the same asset.
Futures ETFs involve trading in futures, which are intricate financial products suitable mainly for experienced investors.
A spot ETF is not the same as a futures ETF because a spot ETF follows the current price of something. Recently, the approval of spot Bitcoin ETFs by the SEC has caused many investors to sell their Bitcoin and make profits. This has led to a significant decrease in Bitcoin’s price over the past 24 hours due to more supply than demand.
The drop in Bitcoin’s current price has also triggered a series of liquidations, affecting the Bitcoin futures market. When futures are liquidated, it can lead to more declines in the current price as traders become less interested in holding onto their assets for the long term.
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Is Bitcoin a Safe Investment?
In 2023, cryptocurrency markets bounced back a lot, especially Bitcoin, which gained 156% by the end of the year. Many investors think this recovery marked the end of the tough times for cryptocurrencies in 2022 when the FTX crypto exchange quickly fell apart in November.
Because of FTX’s collapse and other events, U.S. regulators started taking strict actions against exchanges and companies involved in trading and creating cryptocurrencies.
Gary Gensler, who leads the SEC, says that his agency thinks most cryptocurrencies are like securities and should follow existing rules.
The SEC has taken legal action against some crypto exchanges, like Binance and Coinbase, accusing them of selling securities without the proper licenses. Gensler and the SEC say that Bitcoin is more like a commodity than a security.
They suggest that the CFTC, not the SEC, should regulate it. As of the first few weeks of 2024, Bitcoin has only gone up by about 3%, and its current price is $43,000, which is 36% lower than its highest price of $68,000 in November 2021.