Lots of people started selling bitcoin after the SEC made it easier to buy two weeks ago

There was a whole lot of excitement around the prospect of exchange-traded bitcoin funds a couple weeks ago, when the US Securities and Exchange Commission announced that it had approved use of the investing tool. Someone even hacked the SEC’s account on the X social media platform to break the news early! But that enthusiasm hasn’t translated to a rise in the cryptocurrency’s price.

The Financial Times reports that bitcoin prices are down 15% since Jan. 10, the day the SEC gave its blessing for ETFs, which enable lay investors to jump in and out of commodities more easily than if they had to figure out how to buy them directly. The price is now below $40,000 for the first time since early December.

Part of the reason for the decline is because Grayscale, the trust that had planned to pioneer bitcoin ETFs, is now losing business to lower-priced competitors. Grayscale charges customers 1.5% of their invested assets; a similar BlackRock ETF charges 0.12%. The Wall Street Journal reports that Grayscale has seen $2.8 billion in outflows over the past couple of weeks.

Though many people remain interested in bitcoin, very few people own very much of it. That means that big moves have an outsized impact on price. A November working paper from the National Bureau of Economic Research also suggests that bitcoin acts just like a lot of other tradeable assets. When there’s a surge in value—bitcoin is still up nearly 40% since news of the SEC’s pending approval of ETFs began circulating in October—a lot of investors try to get their money back while the getting is still good.

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