© Reuters. In this illustration taken on October 24, 2023, a representation of the cryptocurrency bitcoin and a price chart are seen. REUTERS/Dado Ruvic/Illustration/File photo
(Reuters) -Bitcoin fell to a seven-week low on Monday, falling below $40,000 for the first time since the launch of 11 spot bitcoin exchange-traded funds on Jan. 11.
The world's largest cryptocurrency was last down 3.98% at $39,938.00, trading at its lowest level since December 4 after a brief recovery. Ether, the second-largest cryptocurrency, fell 6.37% to $2,328.30.
had rallied amid growing enthusiasm that the US Securities and Exchange Commission (SEC) would approve bitcoin ETFs, opening up the cryptocurrency to a host of new investors. Bitcoin has gained about 70% since August, when a federal court forced the SEC to review its decision to reject Grayscale Investment's bitcoin ETF application.
Some analysts said they expected Bitcoin to initially shave some of those gains.
Other market watchers said Monday that the cryptocurrency was having trouble competing with traditional stocks after the benchmark index hit new all-time highs on Monday boosted by semiconductors and other technology stocks.
“It seems as if bitcoin investors are riding a downward escalator right now while traditional financial benchmarks enjoy the easier path to all-time highs,” said Antoni Trenchev, co-founder of crypto lender Nexo.
He noted that previous major crypto events, including the initial public offering of cryptocurrency exchange Coinbase (NASDAQ:) and the launch of bitcoin futures, were followed by similar bitcoin declines.
Trenchev said bitcoin also came under pressure from exits from Grayscale Investment's bitcoin trust, which converted to an ETF when the SEC approved the other bitcoin ETF products earlier this month.
CoinDesk reported Monday that FTX, which entered bankruptcy in 2022, sold 22 million shares worth nearly $1 billion in the ETF.
“Bitcoin spot ETFs are in danger of joining the…cryptocurrency hall of infamy,” Trenchev said.
