Bitcoin Slides Below $39,000 as Selloff Continues

Bitcoin slipped below $39,000 early Tuesday morning as markets continued to feel after effects of Bitcoin ETF share selloffs.

At the time of writing, Bitcoin was changing hands for $38,927—that’s 4.3% lower than yesterday and 9% lower than this time last week, according to CoinGecko.

Bitcoin’s lagging price has also impacted the ORDI and SATS tokens, which have sunk 12% and 16% in price since Monday. The two tokens are related to Ordinals, digital assets inscribed on a satoshi, the lowest denomination of BTC. They were made possible by an update to the Bitcoin network called Taproot.

Popular altcoin Solana (SOL) was down 9%, while Optimism (OP) and Avalanche (AVAX) had lost 10% each since yesterday.

At least one cause for sluggish prices has been a post-Bitcoin ETF selloff.

The Grayscale Bitcoin Trust (GBTC) had $28 billion worth of assets under management on January 10, when the SEC approved 11 different ETFs to begin trading the next day. But as of Tuesday morning, the fund has seen $6 billion worth of redemptions.

As shares of GBTC have been redeemed, Grayscale has been selling the Bitcoin that was backing those shares. All that selling pressure has been bad news for prices. That’s sent the global crypto market capitalization down to $1.65 trilllion—the lowest it’s been since the start of the year.

GBTC is an outlier among the Bitcoin ETFs that started trading earlier this month. That’s because GBTC began trading as a closed-end fund in 2013 for accredited investors and had a mandatory 6-month lockup period. That meant it was difficult for customers to redeem their funds and cash out.

But once GBTC was converted into a spot Bitcoin ETF, share lockups were a thing of the past.

In many ways, one fund’s loss has been other funds’ gain. The iShares Bitcoin Trust (IBIT)—BlackRock’s BTC offering—accumulated more than $1 billion assets under management within a week. The IBIT fund now has $1.3 billion worth of assets under management, according to iShares.