Bitcoin falls to $43,000, spot Bitcoin ETF and blockchain concept stocks plummet.

On the second day of the listing of the spot Bitcoin ETF, digital currencies once again faced selling pressure. Bitcoin's 24-hour decline reached 6.46%, hitting a low of $43,179.57.

Spot Bitcoin ETFs generally fell by about 6%. Among them, DEFI fell more than 6.6%, FBTC fell 6.4%, HODL and BRRR fell 6%, BTCO fell 5.9%, and BITO fell 5.9%.

Blockchain concept stocks also experienced a widespread decline. Among them, Ebang International ADR fell 13.6%, Hut 8 fell 10.7%, Ninth City ADR fell 10.2%, MicroStrategy fell 8.5%, Canaan ADR fell 8.3%, Riot Platforms fell 7.4%, cryptocurrency exchange Coinbase fell 6.2%, and popular online broker Robinhood fell 5.3%.

The U.S. Securities and Exchange Commission (SEC) approved the listing of the first spot Bitcoin ETF for trading starting on Thursday, January 11th. Bitcoin experienced significant volatility throughout the day. On Thursday morning Eastern Time, Bitcoin rose above $49,000, reaching a new high since December 2021, with an intraday increase of about 6.8%. However, the enthusiasm quickly faded, and Bitcoin turned downward during the day, falling back below $46,000. The related ETFs also followed suit and declined.

The poor performance for two consecutive days has caused significant losses for investors who rushed into Bitcoin on its first day of listing. According to calculations based on BlackRock's ETF, an investment of $10,000 on Thursday was reduced to $8,300 on Friday.

Renowned American financial commentator Peter Schiff commented:

"So far, the selling of Bitcoin, Bitcoin ETFs, and other Bitcoin-related stocks has surprisingly been orderly. I wonder when the selling will become more aggressive."

From the perspective of fund flow data, in addition to direct selling of Bitcoin for cash, there is also intense competition among Bitcoin ETFs. Funds are flowing from more expensive ETFs to cheaper ones:

• Although nearly half of the trading volume of Bitcoin ETFs yesterday came from Grayscale ETF, making it the third-largest ETF in terms of trading volume ever recorded, trading volume does not represent the inflow/outflow of investor funds. In fact, funds from Grayscale ETF are actually flowing out.
• Wall Street News website previously mentioned that after the initial promotional period of the fund, BITB, under Bitwise, only charges a fee of 0.20%, which is the lowest among all ETFs, and it has the largest inflow of funds. Other ETFs also have varying degrees of net fund inflows.

In fact, Bitcoin has performed poorly in the past two days, showing a "sell the fact" trend, which is not surprising to some. Analysts had previously warned that the market's excitement might be premature, although the US SEC approved the launch of Bitcoin spot ETFs, the investment community still believes that cryptocurrencies carry risks, and scandals such as the closure of the cryptocurrency exchange FTX in 2022 have raised investors' caution.

The decline in Bitcoin is also related to the fact that many institutions have not yet entered the market. Considering the investment risks associated with Bitcoin itself, Vanguard, Goldman Sachs, Bank of America, and other major institutions are not joining the battle for now. Due diligence, review, and platform approval take time before these ETFs can be purchased by different institutions.

In addition, although the US SEC has "surrendered and compromised," not all trading platforms can trade these Bitcoin ETFs. One reason may be that these funds have not yet obtained approval from the compliance departments of brokerages. According to reports, a representative from Citigroup stated that the bank is evaluating products for retail investors. Even the famous Vanguard is no exception. Some netizens couldn't resist and said they would transfer their pension funds from Vanguard to Fidelity just to buy Bitcoin ETFs.

However, from another perspective, some investors pointed out that due to the limited number of institutional participants in the current onshore market, as well as some market participants who want to buy but cannot, this means that there is a large potential for incremental funds in the future. If more institutions join in the future, it may ignite a new sustained bull market.