Bitcoin experienced a drop this week to around $41,000, continuing its recent bearish momentum amid both positive and concerning developments.
While interest in Bitcoin ETFs has exploded with over $4 billion in new assets under management (AUM), issues like US dollar dominance and high ETF fees add uncertainty.
- Bitcoin price dropped to $41,068 on Monday amid growth of Bitcoin ETFs and concerns over US dollar dominance
- Bitcoin ETFs have accumulated $4 billion in assets under management and 95,000 BTC in just 6 days
- Morgan Stanley warned crypto could undermine US dollar dominance as countries look to reduce dependence
- Grayscale CEO skeptical most approved spot Bitcoin ETFs will succeed long-term due to high fees
- Bitcoin exhibiting bearish bias, facing resistance at $41,800 level, but could rebound if threshold surpassed
In just six days, Bitcoin ETFs from Fidelity, BlackRock and others attracted an astounding $4 billion in AUM and accumulated over 95,000 BTC. This enormous growth signals rising institutional investment and trust in crypto.
However, at the same time, Grayscale’s Bitcoin Trust suffered major outflows exceeding $2 billion.
Grayscale’s CEO remains confident their decade-plus track record and industry leading size will retain assets despite having much higher fees than competitors. He believes most newly approved spot Bitcoin ETFs won’t survive over the long run when the hype diminishes. Still, inflows into these ETFs topped $1.2 billion recently, demonstrating intense retail interest.
Adding to the complex mix of factors, investment bank Morgan Stanley issued a report stating that cryptocurrencies could challenge US dollar dominance as countries seek to decrease dependence. Government policies, geopolitics, inflation and more are making holding dollars less attractive.
As alternatives like CBDCs, stablecoins and Bitcoin gain traction, global currency dynamics may undergo a major shift.
Traders are currently grappling with whether Bitcoin can hold critical support around $40,000-$41,000 after losing its 50-day moving average. Bears have momentum in the short-term, but bulls see reasons for optimism like the upcoming 2024 halving.
Advisors recommend dollar-cost-averaging for retail investors faced with the market’s volatility. Though opinions vary widely, some experts predict Bitcoin reaching as high as $150,000 by the end of 2024 if key levels hold.