The highly anticipated approval of the Bitcoin spot ETF by the U.S. Securities and Exchange Commission (SEC) has led to unexpected market turmoil, with prices plummeting and doubts growing among investors.

Gold advocate and well-known crypto skeptic, Peter Schiff, foresees further losses for the newly launched ETF and shares insights into the unfolding scenario.

Anticipation and Further Decline Post-Approval of Bitcoin Spot ETF

Bitcoin enthusiasts witnessed a surge in the digital currency's price, reaching over US$47,000 in anticipation of the SEC's approval of the Bitcoin spot ETF.

However, the optimism was short-lived, as the value of Bitcoin experienced a decline post-approval, dropping below US$40,000 on Monday and further down to US$39,000 on Tuesday.

Peter Schiff, renowned for his skepticism toward crypto, highlights the current state of the Bitcoin spot ETF, affirming that it is now in a bear market.

"All Bitcoin spot ETFs are now in a bearish market, defined as a decline of 20 percent or more from their peak," he said, as reported by Bitcoin News.

Notably, the Fidelity Wise Origin Bitcoin Fund (FBTC) suffered the most, experiencing a 32 percent decline.

In his subsequent posts, Schiff focuses on the Proshares Bitcoin Strategy ETF (BITO), which tracks Bitcoin futures contracts and was launched in October 2021.

Despite its initial trading price of US$40.88, BITO has undergone a significant decline, hitting a low of US$19, marking a drop of over 50 percent in just over two years.

At the time of writing, BITO is trading at US$19.04, reflecting an almost 52 percent decline since its launch.

Schiff argues that the introduction of the new BTC ETF does not create additional demand but merely shifts existing demand. Investors who may have previously invested in actual Bitcoin or Bitcoin-related assets such as Microstrategy (MSTR) or Grayscale Bitcoin Trust (GBTC) stocks are now shifting to the newly introduced ETF.

Metaphorically, Schiff describes this shift as rearranging the deck chairs, emphasizing that it will not prevent the inevitable decline in the market.

Specifically, Coinbase (COIN) emerges as one of the biggest losers in this market shift. Although Coinbase serves as the custodian for Bitcoin held in this ETF, speculators who previously traded BTC through Coinbase are now turning to the ETF.

Furthermore, individuals who initially purchased COIN as a substitute for Bitcoin are now redirecting their investments to the ETF. On Monday, JPMorgan also downgraded Coinbase's stock from Neutral to Underweight, with a target price of US$80. At the time of writing, COIN is trading at US$124.19.

Before the approval of the Bitcoin spot ETF, Schiff had expressed his concerns, warning about speculative selling and minimal institutional demand. He also predicted that the SEC Chair would introduce stringent crypto regulations, potentially leading to a significant drop in Bitcoin prices.