Bitcoin Value Plunges as Hong Kong Debuts First Spot Bitcoin ETFs
Summary:
Bitcoin's value has dipped to under $61,000 following the launch of the first spot Bitcoin ETFs in Hong Kong. The decrease has sparked concerns that Bitcoin may drop below $60,000 in the near future. The newly introduced ETFs in Hong Kong drew a trading volume of $12.4 million on their first day. On the other hand, there are speculations that the price drop could present a significant buying opportunity for long-term investors.
Bitcoin (BTC) has seen a fall in price, dropping below the $61,000 mark after Hong Kong introduced the first batch of spot Bitcoin exchange-traded funds (ETFs). This has sparked concerns that Bitcoin could potentially fall under $60,000 in the subsequent days. On April 30, one day after the release of these spot Bitcoin ETFs in Hong Kong, Bitcoin hit a weekly low of $60,543. Compared to the weekly and monthly charts, this giant in the world of cryptocurrencies is down by 7.3% and 13% respectively, goes the CoinMarketCap data.
Ironically, the newly launched ETFs in Hong Kong only drew in $12.4 million in transaction volume during its opening day. In comparison to the U.S.' first day Bitcoin ETF trading volume which stood at a staggering $4.6 billion, this figure seems minuscule. Yet, keeping in mind the market size of Hong Kong, it is quite substantial, equating to an American trading volume worth $1.6 billion, says veteran Bloomberg ETF analyst Eric Balchunas.
From the total daily volume of $12.4 million, spot Ether ETFs in Hong Kong captured roughly 14%, leaving 86% to flow into Bitcoin-oriented ETFs.
The dip in Bitcoin's price following the deployment of Hong Kong ETFs is a shielded 'sell-the-news' occurrence, said Mehdi Lebbar, co-founder of the institutional risk assessment platform, Exponential.fi. In the words of Lebbar, market participants forecast such events and trigger a price hike before the news becomes public. Once the news is publicized, they start to profit from it. This indicates a tactical reaction from short-term dealers trying to exploit the uproar, trailed by a modification as the news gets absorbed.
However, Bitcoin's price trend has been downward in the recent weeks, could see it fall even below the $60,000 mark, pointed out Ben Caselin, CMO of VALR exchange. Still, this could provide long-term holders a great buying opportunity, especially in the wake of corrections from previous post-halving rallies, said Lebbar.
According to Coinglass data, if Bitcoin's value were to fall below $60,000, over $306 million worth of cumulative leveraged long positions would be liquidated across all exchanges. As reported by Cointelegraph, market participants should be observant of the key financial points of interest at $60,000 and $51,000.
Published At
4/30/2024 7:27:52 PM
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