Bitcoin Plummets Below $40K Amid ETF Trading and Liquidations

Bitcoin has dropped nearly 20% since the launch of the first US spot exchange-traded funds (ETFs) on January 11, with the digital asset trading at $39,718 as of Tuesday. Speculators are exercising caution amid concerns about the impact of these products. Nine new US spot Bitcoin funds began trading on the same day, while the Grayscale Bitcoin Trust converted into an ETF. BlackRock's iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund saw significant inflows, while $2.8 billion exited the Grayscale fund. The recent drop in Bitcoin's price is attributed to macroeconomic conditions, selling pressure from traders, and the FTX bankruptcy estate offloading assets.