Bitcoin has fallen by more than a fifth since hitting a three-year high earlier this month after the first U.S. spot bitcoin exchange-traded funds (ETFs) were approved, with investments previously bought in anticipation of the ETF approvals. Investors sold off after confirmation.

Bitcoin was last trading at $38,900, a 20.6% drop from the three-year high of about $49,000 hit on January 11, the day the U.S. Securities and Exchange Commission (SEC) approved a batch of spot Bitcoin ETF listing applications.

Analysts at Deutsche Bank say nearly $4 billion has flowed into newly launched spot Bitcoin ETFs, particularly products run by BlackRock and Fidelity.

But they said $2.8 billion of that amount was outflows from Grayscale. Grayscale, once a fund and now an ETF, previously dominated the regulated Bitcoin investment market.

Deutsche Bank said another factor in the decline in Bitcoin prices was the sale of assets by bankrupt cryptocurrency exchange FTX.

Major U.S. cryptocurrency exchange CoinbaseCOINShares fell about 4% in pre-market trading on Tuesday after JPMorgan downgraded the stock to "underweight" from "neutral" and said "the catalytic effect of the Bitcoin ETF that will drive the cryptocurrency ecosystem out of the winter will allow market participation." disappointed.”

Other cryptocurrency-related stocks also came under pressure. (over)