- FTX sold 22 million GBTC shares, contributing to Grayscale’s $1 billion Bitcoin outflow since its ETF conversion
- The massive BTC outflow is speculated to be a primary factor in Bitcoin’s recent value decline from $49,000 to $40,000 in under two weeks
- Bitcoin’s future price is anticipated to either stagnate or further decline until Grayscale completes its selling activity
If you’ve lost money in the recent Bitcoin drop you can blame FTX…again. Coindesk has reported that FTX has disposed of some 22 million Grayscale Bitcoin Trust (GBTC) shares since the ETF arms race began, making up $1 billion of the $3.45 billion in bitcoin that Grayscale has shed since it successfully converted into an ETF. It has been theorized that this massive outflow, which comes in the form of BTC itself, is a key reason behind Bitcoin’s recent fall in value from $49,000 to $40,000 in less than two weeks, leaving many expecting Bitcoin’s price to continue to either stagnate or drop further until Grayscale is done.
Grayscale Held 620,000 Bitcoin
The Grayscale Bitcoin Trust launched in 2013 and has been hoovering up bitcoin for years, accelerating its buying between 2020 and 2021 to the point where, at the start of 2024, it owned 620,000 on behalf of its shareholders.
The plan was always to turn the trust into a Bitcoin ETF, which was the only way that GBTC shareholders would be able to cash out, so it’s no surprise that Grayscale has seen the biggest outflows since 11 Bitcoin ETFs were granted earlier this month:
Woof. BAD day for #Bitcoin ETFs overall in the Cointucky Derby. $GBTC saw over $640 million flow out today. Outflows aren’t slowing — they’re picking up. This is the largest outflow yet for GBTC. Total out so far is $3.45 Billion. (Don’t have BlackRock data yet) pic.twitter.com/jNOyiTADVq
— James Seyffart (@JSeyff) January 23, 2024
Coindesk reported that FTX has contributed massively to this, liquidating $1 billion worth of its holdings in order to bring more cash back to the estate for distribution and lawyers’ fees.
A Reversal of Fortunes for Bitcoin?
This scramble to take profits has led to the Bitcoin ETF announcement acting as a ‘sell the news’ event as many, including FullyCrypto, suggested it might, with the price dipping below $40,000 overnight having spiked to $49,000 on the day of the announcement.
With FTX now done selling its GBTC holdings we may see a tailing off of outflows from Grayscale, which can only be a good thing for the Bitcoin market as a whole, although of course we can’t know how many GBTC shareholders are planning to cash in at this point.