why bitcoin fell below $67,000

The queen of cryptocurrencies suffered a strong correction this Friday morning, falling 7% in a few hours.

New entrants to the bitcoin market will need to have strong backbones. While bitcoin was advancing towards $75,000, the cryptocurrency suffered a strong correction this Friday, March 15. Bitcoin fell below $67,000 this morning, losing 7% from its highest point of the day at $72,000. At 9:30 a.m. this Friday morning, bitcoin is struggling to recover and is trading around $67,700.

For some financial analysts, this fall can be explained after the too rapid surge in assets in recent weeks. Recent US CPI data has “cooled expectations of a Federal Reserve (Fed) rate cut and gold prices have also fallen”, said Greta Yuan, head of research at VDX, an approved exchange in Hong Kong, in a note consulted by Coindesk.

“The recent surge in bitcoin prices was too rapid for the market to properly price, so the current correction is expected,” he said.

For other analysts, further corrections in bitcoin are to be expected, due to upcoming macroeconomic announcements and in view of the “halving” (see our “Understand everything” about this event which will take place in April). The market “is adjusting its expectations regarding bitcoin, also taking into account the uncertainties presented by having”, specifies Adrian Wang, founder and boss of the company Metalpha.

Madness around ETFs

As a reminder, bitcoin has been soaring since the start of 2024 due, in particular, to the arrival of spot bitcoin ETFs on the market. On January 10, the American stock market watchdog (the SEC) authorized 11 spot bitcoin ETFs, offered in particular by asset managers like Blackrock and Fidelity. An ETF (or Exchange Traded Funds) is an index fund trading on a stock exchange which follows the evolution of a stock index (or one or more financial or physical assets, such as gold) by replicating the increase as well as the drop in the price of this index (or these assets).

Before January 10, the SEC only approved Bitcoin futures ETF (this was the case since 2021) but not spot (spot) bitcoin ETFs, considering that futures are more difficult to manipulate because the market is based on the futures prices of the Chicago Mercantile Exchange (CME), regulated by the Commodity Futures Trading Commission (CTFC).

Since their launch, spot bitcoin ETFs have already drained billions of dollars into the bitcoin market, sometimes doing better than ETFs in the gold market. For example, the Blackrock product, called iShares Bitcoin Trust (IBIT), crossed the $10 billion mark in assets under management just seven weeks after its launch. For comparison, the first gold-backed ETF in the United States, the SPDR Gold Shares (GLD), took two years to reach such an amount.