ORDI experiences a 14% decline as Bitcoin’s value dips below $40k.
Taking inspiration from Casey Rodarmor’s Ordinals Protocol, the ORDI token experienced a significant drop of over 14% on January 23rd, reaching a new monthly low as Bitcoin also receded to $39,000.
The Bitcoin-centric cryptocurrency, ORDI, fell below $55 for the first time since December of the previous year. This decline can be attributed to a general market downturn, which seems to have been caused by outflows from spot Bitcoin ETFs.
Speculations suggest that the nosedive of ORDI is a result of Bitcoin’s price movement during a widespread dip in the cryptocurrency markets. Additionally, daily outflows from Grayscale spot Bitcoin ETF, the largest and most liquid BTC-focused fund approved for trading on January 10th, have also played a role.
This decline occurred just hours after the largest cryptocurrency retraced below $40,000, less than two weeks after the decision to allow spot BTC ETFs by the United States Securities and Exchange Commission (SEC).
The outflows from Grayscale’s ETF put selling pressure on Bitcoin’s price, as the asset manager had to liquidate actual BTC in order to support redemptions and allow traders to book profits. According to crypto.news, Grayscale has sold over $2.1 billion worth of BTC since the SEC’s approval announcement, and recorded $2 billion in exits from its funds.
Around half of these outflows were attributed to the bankrupt crypto exchange FTX, which recently dropped a lawsuit against Grayscale and its parent company, Digital Currency Group.
During the same period, Bitcoin fell by more than 20% and is currently down 10% this month, with the token trading at $39,300 at the time of writing.
While Grayscale’s ETF is currently the largest, with a market cap exceeding $20 billion and a BTC portfolio of 558,280 Bitcoins, other issuers such as BlackRock and Franklin Templeton have also increased their BTC holdings since the official launch of ETFs on January 11th.
According to Arkham Intelligence, BlackRock, Bitwise, Fidelity, and Franklin Templeton now hold over 80,000 BTC, which is worth nearly $5 billion.
As competition grows, asset managers have been cutting fees for European Bitcoin ETFs.
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