FTX continued to sell nearly $1 billion of Grayscale GBTC, causing Bitcoin to fall below 40,000?

Since the U.S. Securities and Exchange Commission (SEC) approved a Bitcoin spot ETF, BTC prices have continued to fall from a high of $48,969. As of early this morning, BTC has fallen below the 40,000 mark and is currently oscillating around $39,750.

Informed person: FTX sold nearly US$1 billion of GBTC

The market generally believes that the recent decline of Bitcoin, together with Grayscale GBTC investors, made a large amount of gains after the negative premium approached zero. Related to profit settlement.

According to Coindesk reports, late yesterday night, after reviewing private data and interviewing two people familiar with the matter, they broke the news that those who sold GBTC in large quantities included the FTX bankruptcy liquidation team. These individuals sold approximately 22 million GBTC shares worth nearly $1 billion, almost wiping out their GBTC holdings.

According to the legal documents filed by FTX on November 3, 2023, as of October 25, 2023, the number of GBTC shares held by FTX was 22.3 million shares, with a total value of nearly US$600 million. However, on the first day of trading after GBTC was transformed into a Bitcoin spot ETF, the value of GBTC held by FTX rose to approximately US$900 million, with the closing price at that time being US$40.69.

Bloomberg quoted people familiar with the matter today as saying that FTX sold more than two-thirds of its total holdings of more than 22.28 million in the first three trading days after GBTC was converted to ETF, with an estimated total amount of more than $600 million.

FTX affiliate Alameda Research on Monday withdrew its lawsuit accusing Grayscale of charging excessive fees on GBTC, perhaps because the negative premium was close to zero.

Is GBTC selling pressure expected to ease?

According to Coinshares data, more than US$2.9 billion has been withdrawn from GBTC since GBTC transformed into a spot ETF; currently, Grayscale’s official website shows that GBTC still manages more than US$22.1 billion in assets.

But what may give investors a sigh of relief is that if FTX has indeed sold almost all of its GBTC holdings, one of the huge sources of selling pressure on GBTC in the future is expected to be eliminated.

Chris J Terry, chief architect of BTCdata, tweeted on the 21st to warn that before the liquidation of GBTC is completed, the price of Bitcoin will continue to be flat or fall. Grayscale’s decision to keep the ETF management fee at 1.5%, Will become the biggest strategic mistake in the history of cryptocurrency.

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