The Impact of Grayscale Bitcoin Trust Sales on the Bitcoin Market

Posted on 23/01/2024 | 617 Views

The recent performance of Bitcoin (BTC), particularly following the January 11 debut of U.S.-based spot Exchange-Traded Funds (ETFs), has been influenced by notable sales from the Grayscale Bitcoin Trust (GBTC). As of January 19, GBTC's holdings had decreased to approximately 567,000 Bitcoin, a drop from nearly 620,000 before the launch of the spot ETFs. This decline in holdings coincides with the new spot ETFs attracting over 94,000 Bitcoin and amassing AU$ 5.93 billion (US$ 3.9 billion) in assets under management.

One significant factor contributing to this shift is the higher management fee of GBTC. This has led to speculation that some of the 53,000 Bitcoin shift to the new, lower-cost ETFs might be from existing GBTC investors.

However, a recent CoinDesk report brought another dimension to light. It revealed that the bankruptcy estate of the defunct crypto exchange FTX sold its entire GBTC holding of 22 million shares (equivalent to almost 20,000 Bitcoin) for close to AU$ 1.52 billion (US$ 1 billion). This sale accounts for more than one-third of the total GBTC sell-off.

From a market perspective, this is seen as a bullish signal. Firstly, a significant portion of GBTC's selling pressure came from a single non-economic entity. Secondly, it implies that there has been an influx of nearly AU$ 1.52 billion (US$ 1 billion) more in fresh investment into the new spot ETFs than initially assumed.

The AU$ 1.52 billion (US$ 1 billion) worth of GBTC sales by the FTX estate means that the inflows into the new ETFs were not just recycled funds from GBTC. Despite these insights, sellers currently maintain an advantage in the Bitcoin market, with the price showing a 2.8% decrease over the past 24 hours, standing at around AU$ 61,408 (US$ 40,400).

It's in these calmer moments that the most strategic investments are often made, capitalising on the market's natural ebb and flow.

 

About Ainslie Crypto:

Considering securing your cryptocurrency trading, purchasing, or exchanging strategies? Join us here or connect with Ainslie Crypto's team at 1800 AINSLIE or via [email protected]. We offer dedicated, personalised ‘human to human’ assistance to ensure the seamless, secure integration of cryptocurrency into your portfolio, whether for personal investment, business strategy, or your Self-Managed Super Fund (SMSF). Ainslie have been a trusted dealer and custody provider for Gold 1.0 for 50 years and bring the same service to Gold 2.0, Bitcoin, since 2017.

In an era where traditional banking systems impose increasing limitations, Ainslie Crypto offers a forward-thinking payment solution with the Australian Digital Dollar (AUDD) platform. Developed by Novatti, AUDD allows you to navigate beyond the constraints of conventional financial systems, offering stability, security, and ease in your crypto transactions. 

Unchain yourself on-chain.

Want to swap directly between bullion and crypto? Ainslie seamlessly provide swaps between these two hard assets.

At Ainslie, our commitment extends beyond just transactions. We specialise in providing secure digital wealth protection. Our robust crypto custody services are backed by rigorous, real-time internal audits, ensuring your investments are not only secure but also managed with the highest standard of care and expertise. You can always see your own segregated wallet address and balance, value and trade history. Trust Ainslie Crypto to be your partner in navigating the dynamic world of digital assets, where we blend human insight with advanced technology to deliver a service that stands apart in the industry.