Bitcoin ETF Euphoria Fades, Pushing Prices Sharply Lower

The price of the cryptocurrency is down $16,000 from its highs.

Bitcoin’s tumble over the past month has wiped out a good chunk of its post-ETF-approval gains.

The cryptocurrency was last trading around $57,600, up 25% from its $46,000 level on Jan. 10, the day before 10 spot bitcoin exchange-traded funds began trading in the U.S.

Bitcoin's price topped $73,000 in March as bitcoin ETF hype reached a crescendo. But interest in the products has cooled since then, and it’s become clear that much of the inflows into the funds since their debut has been arbitrage-related. 

With ETF demand waning, and without a strong bullish narrative acting as a tailwind, bitcoin's price has slumped. 

Zooming out, bitcoin has almost quadrupled since dropping near $16,500 in late 2022 at the depths of the last bear market. The largest crypto by market value is trading roughly at levels it reached in 2021 when demand for crypto assets jumped. 

Bitcoin Underperforms Mega Tech

Sure, bitcoin's current levels might be considered a victory by some, and the cryptocurrency is doing much better than many of the speculative assets that crashed and burned in 2022.

But it is underperforming mega cap tech stocks, which have been soaring thanks to the AI boom.

Bitcoin’s performance since the heady days of 2021 is mediocre, and that’s a function of the type of asset that it is: volatile, unpredictable and still in its early years. While crypto still holds promise, it’s been overshadowed by AI as the most exciting new technology of the moment. 

ETFs injected a dose of thrill into the bitcoin market earlier this year, but the hype has faded for now. A new bullish narrative or a push higher in animal spirits across financial markets may be needed to reinvigorate bitcoin prices and send them back toward the all-time highs set in March.