Key Points
- Bitcoin’s (BTC) price dropped below $61,000 following the launch of the first spot Bitcoin ETFs in Hong Kong.
- The ETFs in Hong Kong had a trading volume of $12.4 million on the first day, with 86% flowing into Bitcoin-based ETFs.
The price of Bitcoin (BTC) fell under the $61,000 mark after the first spot Bitcoin exchange-traded funds (ETFs) were introduced in Hong Kong.
Bitcoin Price Drop and Hong Kong ETF Launch
Bitcoin’s value decreased to a weekly low of $60,543 on April 30, a day after the first batch of spot Bitcoin ETFs were launched in Hong Kong.
According to CoinMarketCap data, the world’s leading cryptocurrency is down over 7.3% weekly and 13% monthly.
On the first day, the Hong Kong-based ETFs accumulated only $12.4 million in trading volume.
This is a significant figure considering the size of the Hong Kong market, equivalent to $1.6 billion worth of trading volume in the United States, as per senior Bloomberg ETF analyst Eric Balchunas.
Bitcoin ETFs Impact and Market Response
Around 14% of the $12.4 million daily trading volume was captured by spot Ether ETFs in Hong Kong, with the majority, 86%, flowing into Bitcoin-based ETFs.
The price drop of Bitcoin following the Hong Kong ETFs debut is a typical “sell-the-news” event, as noted by Mehdi Lebbar, the co-founder of institutional-grade risk assessment platform Exponential.fi.
Market participants often anticipate these events, leading to a price surge prior to the actual news, and subsequently take profits once the news is public.
In the United States, weekly Bitcoin ETF net flows remain negative.
The ten Bitcoin ETFs saw over $257 million worth of negative net outflows this week, down from over $396 million in negative outflows during the previous week, according to Dune data.
The U.S.-based ETFs were a significant part of Bitcoin’s price appreciation in 2024.
By Feb. 15, Bitcoin ETFs accounted for about 75% of new investment in the world’s largest cryptocurrency as it surpassed the $50,000 mark, based on CryptoQuant research.
Bitcoin was already on a downward trend over the previous weeks, which could see it fall below the $60,000 mark, according to Ben Caselin, the CMO of VALR exchange.
While Bitcoin may indeed fall below the $60,000 psychological mark, it could present a good buying opportunity for long-term holders, in line with corrections from previous post-halving rallies, according to Lebbar.
Over $306 million worth of cumulative leveraged long positions would be liquidated across all exchanges if Bitcoin’s price fell below $60,000, according to Coinglass.
Traders should keep a close eye on the key $60,000 support level this week, according to Matt Bell, the CEO of open-source software firm Turbofish.
