News View Non-AMP

Why Did the Bitcoin Price Drop Below $41k?

Published by
Mustafa Mulla

Bitcoin (BTC) experienced a rapid 4.5% decline, hitting a one-month low at $40,800 on Thursday. This drop aligns with the broader trend observed in the CoinDesk 20 Index, indicating a 4.6% decline over the last 24 hours. In the wake of the recent approval of new spot Bitcoin ETFs on January 11, all of these twists and turns are just adding to the drama.

Come, dive in!

ETF Magic Fading?

Following the approval of new spot Bitcoin ETFs, there was a brief surge in Bitcoin’s value, but the enthusiasm quickly waned, resulting in a significant 13% decrease in the cryptocurrency’s price. The volatile nature of these developments left investors on edge.

Despite significant inflows into the new spot Bitcoin ETFs, there were also substantial outflows, particularly from Grayscale’s GBTC. This contrasting movement of funds adds a layer of complexity to the overall market scenario.

The Numbers Speak

Recent data reveals that new spot ETF issuers collectively acquired over 68,000 bitcoins during their first week of trading. In contrast, GBTC experienced an outflow of about 40,000 bitcoins during the same period, resulting in a net addition of approximately 28,000 bitcoins to Bitcoin ETFs.

Read More: Why is Grayscale Dumping Bitcoin ?

Analyst Vetle Lunde from K33 Research provides a global context, noting that even before U.S. regulatory approval, various spot Bitcoin products were already trading worldwide. Currently, there are over 864,000 bitcoins in these global investments, making the new U.S. investments appear comparatively modest.

Besides people leaving Grayscale’s GBTC, others in Canada and Europe also took money out of their Bitcoin investments last week. They either made some profit or chose to invest in the new U.S. investments because they were cheaper.

BITO’s Puzzling Influence

Adding intricacy to the situation is the ProShares Bitcoin Strategy ETF (BITO), which, despite holding no Bitcoin, manages over $2 billion in assets under management. Even though it doesn’t own bitcoins, it affects much of the Bitcoin market. Lunde said that these kinds of investments now make up 48% of the total interest in Bitcoin.

Also Read: Why is Bitcoin’s Price Plunging Despite Spot ETF Approvals? Peter Schiff Weighs In

So, what’s next?

As investors withdraw from unconventional investments like BITO, the market may face increased pressure to sell certain Bitcoin-related assets. This could trigger a short-term drop in Bitcoin’s price.

Brace yourselves, crypto enthusiasts; the journey ahead doesn’t seem easy.

Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.

Recent Posts

Top Meme Coins Set For Major Breakout: PENGU, BONK, FLOKI, DOGE

Meme coins like PENGU, BONK, FLOKI, and DOGE are showing critical technical patterns that could…

July 31, 2025

“End the Fed”: Massie, Trump Turn Up the Heat on Jerome Powell

The fight over U.S. interest rates is heating up. With inflation concerns and economic uncertainty…

July 31, 2025

Top AI Crypto Coins Set for Breakouts: VIRT, RNDR, ASI, NEWT, And TAO

In Brief: The AI crypto sector is leading the market with a +111.82% rise in…

July 31, 2025

Philippines Launches Blockchain Budget System Despite Polygon Outage

The Philippines has taken a major step forward in its digital transformation, launching a new…

July 31, 2025

Grayscale Launches Story Trust for IP Token Exposure

Grayscale has introduced the Grayscale Story Trust, giving investors direct access to the native IP…

July 31, 2025

Top Presale Under $1 as Bitcoin Cash (BCH), Hedera (HBAR) Struggle to Hold Momentum

As the crypto market experiences its usual rotation cycles, one pattern is becoming increasingly evident—investors…

July 31, 2025