Bitcoin Pulls Back from Recent High as Venezuela Shuts Down Petro Crypto Project

Bitcoin retreated from its two-year high price last week as the launch of the first US Bitcoin spot ETF failed to attract significant fresh capital. At the same time, Venezuela terminated its cryptocurrency project, Petro, citing ongoing economic challenges. After hitting $49,000 briefly last week following the approval of ProShares Bitcoin Strategy ETF, the first US Bitcoin futures ETF, Bitcoin pulled back to as low as $41,500 on Monday as analysts had warned the ETF launch may act as a short-term top for prices. Sell the news” events, where asset prices run ahead of an anticipated bullish development and retreat after, are every day in financial markets. While the ETF approval was a landmark development welcomed by the crypto community, bringing greater accessibility and legitimacy, it did not drive as much fresh capital inflows as some had hoped.

Focus Shifts to ETF Inflows

Market attention has now turned to gauging how much capital the new Bitcoin spot ETFs, which started trading last week, will attract over the coming months. J.P. Morgan analysts noted in a research report that significant funds might pour in from other crypto products, but they remain sceptical that a large amount of fresh money will enter the crypto sector solely due to the ETF approval. According to the bank, the initial market reaction to the reluctant SEC nod has been relatively muted, with Bitcoin’s slide from recent highs dampening some optimism. How successfully the ETFs can onboard large institutional investors will be crucial in determining Bitcoin’s price trajectory.

Venezuela Shuts Down Troubled Petro Project

In another development, Venezuela ended the Petro cryptocurrency initiative launched in 2018, removing the project website and all trading functionality. South American President Nicolas Maduro unveiled the Petro amidst an economic crisis exacerbated by US sanctions, claiming it would support the declining bolivar currency. However, the token was mired in controversy from the outset over issues such as using oil reserves as collateral. Venezuela’s opposition-controlled National Assembly also deemed the Petro illegal. Subsequent US sanctions further impeded its development and adoption. Terminating the troubled Petro project was unsurprising, with the country’s economic woes continuing. However, it marks the end of Maduro’s vision for digitizing the bolivar.

Analyst Views on Bitcoin Outlook

Despite the recent pullback, many analysts maintained a bullish longer-term view on Bitcoin, arguing the growing institutional interest and strengthening infrastructure like ETFs set the stage for higher prices over the coming quarters and years. We view the current correction as a short-term fluctuation and not a reversal of the broader trend as investment demand ramps up. The setup remains positive for testing new highs in the months ahead,” said Nigel Green, CEO of deVere Group. However, others cautioned further volatility should be expected, with macro triggers like inflation readings, interest rate moves and geopolitical risks capable of destabilizing momentum. Whether Bitcoin can sustain its position above $40,000 in coming sessions will thus be closely watched. While the Bitcoin spot ETF launch failed to provide an immediate boost to prices as some expected, longer-term investor confidence in the digital asset’s growing mainstream acceptance through pathways like regulated investment vehicles remained sound, according to analysts. However, further consolidation after the recent parabolic gains also appears likely. Meanwhile, Venezuela’s termination of its Petro crypto venture reflected the project’s troubled nature and the ongoing economic challenges in the South American country.