[Bitcoin Now] US Spot ETF Catalyst Exhausted... Down 2.22% from Last Week

[Image source=Yonhap News]

The leading virtual asset Bitcoin plummeted to the 56 million KRW range about two days after the positive news of the approval of a spot Exchange-Traded Fund (ETF) in the United States was realized. The depletion of the catalyst led to profit-taking sales, resulting in a significant drop.

According to the global virtual asset market tracking site CoinMarketCap, as of 7:12 PM on the 14th, the price of Bitcoin was 56.46 million KRW, up 0.57% from the previous day. Compared to seven days ago, it is down 2.22%, but it has risen 109.85% compared to one year ago.

Bitcoin prices soared to the 64 million KRW range on the night of the 11th after the U.S. Securities and Exchange Commission (SEC) announced the approval of a spot ETF on the 10th (U.S. local time). This was the highest level since December 2021. However, Bitcoin prices fell back to the 56 million KRW range within about two days, giving up all the gains made since the beginning of the year.

The plunge in Bitcoin prices was due to the disappearance of the ETF approval expectations that had driven prices up throughout last year. According to the U.S. economic media CNBC, Alex Saunders, an analyst at Citigroup, stated in a client note, "We believe the virtual asset market has already moved on to the next story."

He added, "Ethereum is rising more than Bitcoin," and analyzed that "this is likely because the second-largest token (Ethereum) in the virtual asset market is also expected to receive ETF approval." Ethereum is the leading altcoin (virtual assets other than Bitcoin). In fact, Ethereum is currently trading around 3.3 million KRW, showing a 12% increase since the beginning of the year.

However, the Bitcoin spot ETF is viewed as a long-term positive factor. There is also a forecast that Bitcoin's asset value will emerge in the $30 trillion asset management market. According to CNBC, Standard Chartered (SC) analysts expect $50 billion to $100 billion (65 trillion to 131 trillion KRW) to flow into funds in 2024. CNBC evaluated, "As Bitcoin ETFs begin trading across the U.S. market, large asset managers handling massive funds can also access digital currencies."

On the other hand, some warnings have been raised about the impact of the Bitcoin spot ETF approval on the market. The UK Financial Times (FT) stated, "Financial institutions may need to be cautious," emphasizing that "the spread of Bitcoin speculation and the resulting crash could expose risks similar to those of tech bubbles or real estate bubbles." It further pointed out, "Market democratization is a common characteristic of financial bubbles," and "the idea that everyone can access assets has historically been the 'Siren's song' that lures investors into financial bubbles." The Sirens are mythical creatures who lure sailors to their deaths with their songs.