16 Jan, 24

Bitcoin is Down: Dynamics Post-ETF Approvals

bitcoin is down banner


In January 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs), marking a significant milestone in the cryptocurrency world. Despite this groundbreaking development, the price of Bitcoin surprisingly trended downwards. This article explores the potential reasons why Bitcoin is down following this event.

SEC Approval of Spot Bitcoin ETFs

The SEC’s approval of 11 spot Bitcoin ETFs was a long-awaited decision in the crypto community. Notable ETFs included those from Ark, Grayscale, and Blackrock, offering investors direct exposure to Bitcoin through standard brokerage accounts, unlike previous products tracking Bitcoin futures​​.

Market Reactions and Volatility

Following the SEC’s decision, Bitcoin experienced heightened volatility. It saw a surge to nearly $48,000, followed by a downturn to around $45,000, and then a slight recovery. This volatility resulted in significant liquidations in leveraged Bitcoin positions, primarily affecting long positions held by traders anticipating a rise in Bitcoin’s value​​.

Possible Reasons for the Price Decline

  1. Profit-Taking: The anticipation of ETF approvals likely fueled a run-up in Bitcoin’s price. Once the approval was confirmed, investors may have decided to lock in profits, leading to a sell-off.
  2. Market Expectations vs. Reality: Some investors might have overestimated the immediate impact of the ETF approvals. While the approvals were positive for the long-term legitimacy and accessibility of Bitcoin, they did not necessarily translate to immediate large-scale inflows into the market​​.
  3. Regulatory Concerns: Despite the approval, SEC Chair Gary Gensler emphasized that the SEC did not endorse Bitcoin and warned investors about associated risks. This cautious stance from the regulatory body could have dampened investor enthusiasm.
  4. Market Manipulation Speculations: Prior to the official announcement, there was confusion and speculation due to an unauthorized post from the SEC’s account about the ETF approvals. This incident might have triggered uncertainty and mistrust among investors, impacting the market negatively​​.

Impact on the Cryptocurrency Market

Despite the initial downturn, the approval of Bitcoin ETFs is a landmark event. It simplifies and secures Bitcoin investments for a broader investor base, potentially reshaping the dynamics of cryptocurrency investments. The direct exposure to Bitcoin offered by these ETFs could attract new investors, especially those restricted from buying cryptocurrencies directly due to regulatory or logistical reasons.

bitcoin is down infographic


The initial decline in Bitcoin’s price following the SEC’s approval of spot Bitcoin ETFs illustrates the complex and often unpredictable nature of cryptocurrency markets. Factors like profit-taking, market expectations, regulatory perspectives, and market manipulation speculations played roles in this phenomenon. However, the long-term impact of these ETFs could be significantly positive, offering more mainstream and regulated investment avenues into Bitcoin.


  1. What is a Spot Bitcoin ETF?
    • A Spot Bitcoin ETF is an exchange-traded fund that invests directly in Bitcoin, allowing investors to gain exposure to its price movements without owning the cryptocurrency itself.
  2. Why did Bitcoin’s price fall after the approval of Bitcoin ETFs?
    • The price fell due to factors like profit-taking, market expectations not meeting reality, regulatory warnings, and initial confusion due to misinformation about the approvals.
  3. Are Bitcoin ETFs different from Bitcoin futures ETFs?
    • Yes, Bitcoin ETFs invest directly in Bitcoin, while futures ETFs invest in Bitcoin futures contracts, which are derivative financial instruments.
  4. How might Bitcoin ETFs affect the overall cryptocurrency market?
    • They could attract new investors, increase market liquidity, and lend greater legitimacy to Bitcoin as an investment asset.
  5. Should investors be cautious about investing in Bitcoin ETFs?
    • Yes, as with any investment, especially in the volatile cryptocurrency market, investors should conduct thorough research and consider their risk tolerance before investing in Bitcoin ETFs.

About Zerocap

Zerocap provides digital asset liquidity and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets with industry-leading security, contact our team at [email protected] or visit our website www.zerocap.com


This material is issued by Zerocap Pty Ltd (Zerocap), a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799. Material covering regulated financial products is issued to you on the basis that you qualify as a “Wholesale Investor” for the purposes of Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account the financial objectives or situation of an investor; nor a recommendation to deal. Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.
 Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

Like this article? Share
Latest Insights

16 Jan, 24

Web 2 versus Web 3: Key Differences

The internet has undergone significant transformations since its inception, evolving from static Web 1.0 pages to the dynamic and interactive Web 2.0. Now, we stand

16 Jan, 24

Blockchain Business Applications: Improving Any Sector

Blockchain technology, initially synonymous with cryptocurrencies like Bitcoin, has evolved into a multifaceted tool with significant applications across various traditional business sectors. This evolution is

Weekly Crypto Market Wrap, 17th June 2024

Download the PDF Zerocap provides digital asset liquidity and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets

Receive Our Insights

Subscribe to receive our publications in newsletter format — the best way to stay informed about crypto asset market trends and topics.

Want to see how bitcoin and other digital assets fit into your portfolio?

Contact Us
Ready to sign up?
Create an Account