The largest digital asset briefly flirted with a drop below US$40,000 before trading at US$41,160 as of 6:30am Friday in Singapore, a decline of 3% in the past 24 hours. Smaller tokens like Ether, Solana and Polkadot also struggled.
Bitcoin surged 157% last year on optimism about the eventual Jan 11 launch of the first US exchange-traded funds to directly hold the token. Digital assets also got a tailwind from bets on looser monetary policy. Traders are now assessing how much money the ETFs attract and paring expectations for interest-rate cuts.
“This type of correction after a significant run-up is normal for Bitcoin,” said Greg Moritz, co-founder at crypto hedge fund AltTab Capital.
Nine new spot Bitcoin ETFs went live last week, including from BlackRock Inc and Fidelity Investments. The US$25 billion Grayscale Bitcoin Trust converted from a closed-ended structure into an ETF.
BlackRock’s iShares Bitcoin Trust has passed US$1 billion in investor inflows. The equivalent figure for the Fidelity Wise Origin Bitcoin Fund is about US$880 million.
Grayscale’s Bitcoin fund, which was created in 2013, has seen about US$1.6 billion in outflows since it started trading as an ETF.