Bitcoin Drops Below $65,000 Amid U.S. Selling Fears

Julie Bang / Investopedia

Important points

Bitcoin has fallen sharply since its peak on Monday following significant moves by a cryptocurrency tied to the U.S. government.

The Grayscale Mini Bitcoin Trust spot bitcoin ETF is expected to launch on Wednesday.

BlackRock’s iShares Bitcoin Trust saw $210 million inflows on Monday.

The spot ether ETF market saw an outflow of $98.3 million on Monday.

Bitcoin (BTCUSD) has sharply reversed its rally this week, dropping below $65,000 after climbing above $71,000 on Monday.

The price reversal began on Monday after 10,000 Bitcoins, which blockchain intelligence firm Arkham Intelligence said were tied to the U.S. government, were moved, signaling a massive Bitcoin sell-off.

This fund movement is said to have come after US presidential candidates Donald Trump and Robert F. Kennedy Jr. and US Senator Cynthia Lummis made efforts to establish a Bitcoin strategic reserve over the weekend.

Grayscale’s Bitcoin Trust (GBTC) shares are down more than 10%, largely because 10% of the ETF’s bitcoin holdings were split off to launch a smaller, lower-fee Grayscale Mini Bitcoin Trust. GBTC investors will receive one share of the new ETF for every GBTC share they own as of July 30.

Despite the recent price drop, spot bitcoin ETFs saw net inflows of $124.1 million on Monday, with BlackRock’s iShares Bitcoin Trust (IBIT) seeing $205.6 million in inflows, according to Farside Investors. The spot ether (ETHUSD) ETF market continued to suffer from outflows, with the Grayscale Ethereum Trust (ETHE) seeing $210 million exit the fund on Monday, and spot ether ETFs seeing a total of $98.3 million in outflows.

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