Bitcoin Hits Its Deepest Drop Since The FTX Crisis

According to data from CoinMarketCap, Bitcoin unexpectedly plunged sharply on May 1st and is currently trading around $57,600 USD/BTC. At one point, the world’s largest cryptocurrency’s price dropped below the $58,000 mark and fell to nearly $57,000 USD/BTC.

With this adjustment, Bitcoin’s market capitalization has shrunk to $1.134 trillion USD, a 22% decrease from the all-time high set in mid-March.

According to Bloomberg, with a 14% decline, Bitcoin has recorded its worst trading month since Sam Bankman-Fried’s FTX “empire” collapsed in November 2022. Part of the reason comes from the excitement surrounding the launch of ETFs in the U.S. market with diminishing digital asset holdings.

The ETF frenzy propelled Bitcoin to a record high of nearly $74,000 USD in March. However, waning expectations of Fed interest rate cuts have significantly reduced capital inflows into investment products.

As of April 29th, about $182 million USD has flowed out of 11 U.S. ETFs. In previous months, ETFs welcomed billions of dollars in inflows, with the peak in February reaching $6 billion USD.

Bitcoin price falls below $58,000 USD. Photo: CoinMarketCap.

The Bitcoin halving event, occurring every 4 years, marks a reduction in the new Bitcoin supply entering the market, but it hasn’t had much impact since it began on April 19th.

On the other hand, investors are seeking a new breeze in Asia and focusing on the list of Bitcoin and Ether ETFs in Hong Kong. However, the launch on April 30th didn’t inspire much confidence among investors.

Data compiled by Bloomberg shows that the 6 new ETFs had a total trading volume of $11 million USD on the first day. This figure is far from the total volume of $4.6 billion USD that 10 U.S. Bitcoin ETFs recorded at launch.