In a dramatic turn of events, Bitcoin briefly touched a high unseen since the previous year only to reverse course sharply, in tandem with the decline of cryptocurrency-related stocks coinciding with the introduction of new spot Bitcoin ETFs in the United States.

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• Bitcoin’s valuation soared above $49,000 before sharply falling below $46,000 amidst the launch of new U.S.-listed spot Bitcoin ETFs.
• Stocks related to cryptocurrency, including Coinbase and mining companies Marathon Digital and Riot Platforms, faced significant declines in value.
• Trading volumes for newly launched Bitcoin ETFs saw BlackRock’s IBIT leading at $500 million, highlighting investor interest in the evolving crypto market.

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Bitcoin Hits Highs Before Tumbling as ETF Launches Shake Crypto Markets

Amidst a day of heavy trading, Bitcoin’s valuation experienced a rapid ascent, peaking at $49,042, a figure last seen in December 2021. The leading cryptocurrency advanced from just below $46,000 to surpass $47,000 early in the day and then, spurred by the momentum of early U.S. trading and data from CoinDesk Indices, briefly soared higher. Nevertheless, the rally was ephemeral as Bitcoin relinquished its gains, descending below the $46,000 threshold.

Despite the day’s fluctuations, Bitcoin managed to post a modest uptick of 1% over the preceding 24 hours, maintaining a position slightly above $46,000. The volatility was mirrored in the equities market, where companies with cryptocurrency exposure, particularly Coinbase, encountered a downturn, with shares retracting by 5% from the opening bell. Mining companies Marathon Digital and Riot Platforms similarly faced downturns, their losses surpassing the 10% mark.

Analysts from Mizuho Securities had previously cast a wary eye on Coinbase, maintaining an underperform rating with a target price of $54 for the stock. They speculated that the revenue impacts from the bitcoin ETFs for Coinbase might be less significant than anticipated, dubbing the event a “pyrrhic victory.”

Throughout the day, trading volumes for the newly minted bitcoin ETFs varied. BlackRock’s IBIT commanded the field in terms of volume, accumulating $500 million by mid-morning. Grayscale’s GBTC, now an ETF, reported substantial activity, with volumes exceeding $700 million shortly after the opening of trading.

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