The Bitcoin price has been experiencing significant downward pressure since the Securities and Exchange Commission approved the trading of spot exchange-traded funds in the United States. The premier cryptocurrency fell below $42,000 on Friday, January 12, reflecting a decline of 7% in the past 24 hours.
The underwhelming performance of the Bitcoin price since BTC spot ETFs commenced trading has been a major source of concern for investors and crypto enthusiasts. Anthony Scaramucci, founder of SkyBridge Capital, has weighed in with the possible reasons for the struggling price of the flagship cryptocurrency after such positive development.
Why Bitcoin Price Fell Below The $42,000 Mark
In a recent interview with Bloomberg, Scaramucci gave his opinion on why the Bitcoin price has been facing so much bearish pressure since BTC ETFs started trading in the United States. According to the hedge fund boss, BTC’s recent price decline was triggered partly by sales of Grayscale Bitcoin Trust shares.
Scaramucci said that many shareholders of Grayscale Bitcoin Trust (GBTC), which was also recently converted to a spot exchange-traded fund, were selling to realize losses and shifting to lower-fee alternatives. GBTC recorded roughly $2.3 billion in trading volume on Thursday, marking the largest first-day turnover for an ETF.
In addition, the SkyBridge Capital founder mentioned the bankruptcy estate of the now-defunct FTX exchange has been selling their Bitcoin over the past few days. Scaramucci said during the interview:
The second thing we are seeing is the bankruptcy estate of FTX is unloading into the ETF announcement.
On a much brighter side, Scaramucci anticipates the situation to turn around for the Bitcoin price in the next few trading days. The founder noted:
There is a heavy volume of selling in Bitcoin right now. I do expect the supply overhang to be done in the next six to eight trading days.
Bitcoin’s Trading Volume Hits 15-Month High
As expected, Bitcoin has been enjoying interest from traders since the approval of the exchange-traded funds that track the cryptocurrency. According to a Santiment report, the coin’s trading volume recently surged to its highest level since FTX’s collapse in November 2022.
Meanwhile, Bitcoin’s open interest rates for Binance perpetual contracts jumped by more than $426 million on Friday. This represents the highest level on the world’s largest crypto trading platform since January 1, 2024, according to Santiment.
While these positive developments might have been followed by a surprising drop in Bitcoin’s price, the current FUD (Fear, Uncertainty, and Doubt) in the market could signal a potential price reversal.
Bitcoin price sits above $43,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView