Bitcoin price chart aligning with US Spot Bitcoin ETF launch trends

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The recent decline in Bitcoin (BTC) is not just a market fluctuation, but it bears striking resemblances to its post-launch behavior following the introduction of United States ETFs in January. This could potentially signal an upswing in the price of Bitcoin in the "next week or so."

Spot Bitcoin exchange-traded funds (ETFs) were introduced in Hong Kong on April 30, resulting in a substantial net inflow of $217 million. However, the price of Bitcoin has decreased by nearly 7% since its launch.

While there are some similarities in the price movements following the launch of spot Bitcoin ETFs in Hong Kong and the United States, there are also some key differences to note.

Inflows and Trading Volume: The Hong Kong Bitcoin ETFs have seen a significant $217 million in net inflows since their launch. In stark contrast, the U.S. spot Bitcoin ETFs experienced a staggering $794 million in outflows over the same period. Furthermore, the Hong Kong ETFs accumulated only $12.4 million in trading volume on their first day, a stark difference from the $4.6 billion in first-day trading volume for the U.S. spot Bitcoin ETFs.

Timing and Macroeconomic Factors: The launch of the Hong Kong Bitcoin ETFs is not occurring in isolation. It comes at a unique time, just after the Bitcoin halving event, which historically has often been followed by a period of "sideways" price action. Additionally, the launch coincides with continued heightened tensions in the Middle East and the U.S. Federal Reserve's extension of interest rate hikes, all of which could potentially influence the market dynamics.

ETF analysts argued that the $217 million in net inflows to the Hong Kong ETFs is a relatively high figure, considering the smaller size of the Hong Kong market compared to the U.S. However, some traders are concerned that these inflows may not offset recent large outflows seen from U.S. Bitcoin ETFs.

Crypto trading teams expressed the view that the Hong Kong Bitcoin ETFs may not be able to fully absorb the selling pressure originating from the U.S. ETF outflows, potentially preventing a similar price breakout pattern.

On the other hand, some traders see the recent Bitcoin price decline as a healthy market correction needed for the cryptocurrency's price to move forward. Bitcoin's price rose by 3.00% as of today, standing at $59,366, but the trading volume dropped by 39.24% in the last 24 hours. 

Additionally, on May 2, 2024, the aggregate holdings of the top 10 entities in the Bitcoin market stood at 823,827 BTC, holding 3.923% of the 21M BTC supply. Grayscale’s GBTC leads the pack of U.S. Bitcoin ETF holdings with 295,126 BTC, representing 1.405% of the total Bitcoin supply. 

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash