Crypto Market Sees 3% Jump in Total Market Cap
The crypto market experienced a 3% surge in total market capitalization, signaling broad market gains. This increase was met with positive sentiment and resulted in price appreciations for numerous cryptocurrencies. Bitcoin, in particular, showed resilience in the face of reduced sell pressure from Grayscale GBTC ETF outflows.
The recent surge in Bitcoin’s price, surpassing $41,000 on January 26, bolstered market sentiment and led to price increases for hundreds of cryptocurrencies.
CoinMarketCap reported that 10 tokens saw double-digit price increases within the last 24 hours.
Among the top gainers were Bitcoin BRC-20 token 1000SATS (SATS) with a 21% jump, Conflux (CFX) – also known as “China’s Ethereum” – with a gain of over 15%, and Ethereum Name Service (ENS), which increased by 14%.
Conflux announced the expected launch of a Bitcoin Layer 2 solution by mid-year, while ENS received recognition from Ethereum co-creator Vitalik Buterin earlier in January.
Other notable gainers included Akash Network (AKT), Optimism (OP), Near Protocol (NEAR), Bonk (BONK), ORDI, Chiliz (CHZ), and OKB.
Grayscale GBTC ETF Outflows Slow Down, Indicating a Potential End to Bitcoin’s Sell-Off
Analysts at JPMorgan have observed a slowdown in the consecutive negative net flows for Grayscale’s GBTC exchange-traded fund (ETF), suggesting a potential end to the ongoing Bitcoin sell-off.
Crypto.news reported that profit-taking may have already occurred amounting to approximately $3 billion in outflows from GBTC. This profit-taking is likely attributed to arbitrageurs trading GBTC’s net asset value discount.
The FTX estate, under CEO John J. Ray III, also offloaded around $1 billion in Grayscale converted Bitcoin ETF, contributing to a total of over $4 billion shed by GBTC in just over two weeks.
Eric Balchunas, a Bloomberg expert, predicted a 25% drop in Grayscale’s BTC ETF market capitalization. GBTC currently holds over $20 billion in value and Bitcoin.
This shift in sentiment and potential profit-taking could be due to a rotation into ETFs with lower fees. Grayscale charges a high fee of 1.5%, whereas its competitors offer significantly lower fees ranging from 0.21% to 0.35% after fee waivers.
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Analyst comment
News 1: Positive
As an analyst, the market is likely to continue experiencing gains in the short term as the surge in Bitcoin’s price and positive sentiment spread across the crypto market. This could lead to further price appreciation for various cryptocurrencies.
News 2: Neutral
The slowdown in Grayscale GBTC ETF outflows indicates a potential end to Bitcoin’s sell-off. This change in sentiment and profit-taking may lead to stability in the market. However, the impact on the overall market is uncertain and could depend on the rotation into ETFs with lower fees.
