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Everyone wants to buy and sell bitcoin after the SEC made it easier


Bitcoin has seen a 15% decrease in value over the past two weeks as some investors have utilized the newly introduced bitcoin exchange-traded funds to sell their cryptocurrency holdings and make profits. On January 11, 2024, the US Securities and Exchange Commission approved ten new funds, which collectively garnered $4.7 billion in investments. Many believe that investors are shifting from Grayscale due to its higher fees. The $27 billion trust was previously a closed-end fund before converting to an ETF.

The approval of the new investing tool by the SEC gained attention on social media after a hack leaked the news early. Despite the excitement, why hasn’t this translated into a price surge for bitcoin?

Exchange-traded funds (ETFs) are investment funds traded on stock exchanges that own financial assets like stocks and bonds while tracking and aiming to surpass the underlying index.

Coindesk reports that a significant portion of withdrawals from Grayscale’s bitcoin fund post its ETF conversion are connected to the FTX bankruptcy estate.

Cryptocurrency corporation sells 22 million shares of Grayscale Bitcoin Trust for $900 million

A cryptocurrency firm sold 22 million shares of Grayscale Bitcoin Trust for $900 million, exiting its ownership in the trust. This move is part of a larger pattern of GBTC withdrawals totaling around $2 billion since its ETF conversion, with outflows attributed in part to FTX’s sales.

Prior to the SEC’s approval of spot ETFs, a fee competition was brewing in the market, with Grayscale charging 1.5% compared to competitors’ fees ranging from 0.2% to 0.9%.

Anticipations of ETF approval boosting bitcoin’s price have not materialized, as both bitcoin and GBTC shares have dropped by 13.69% and 12.68%, respectively. This dip may prompt some to consider entering the cryptocurrency market.

Featured Image Credit: Worldspectrum; Pexels

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