- A new data analysis published by Glassnode highlights a significant decrease in assets of the Grayscale Bitcoin
Trust ETF (GBTC).
- A crucial factor contributing to the decline in GBTC assets is the increased outflow volume, estimated to be around $3.5 billion, over the last seven trading days.
- According to sources reported by Bloomberg, the crumbling crypto empire sold over two-thirds of its 22.28 million shares, amounting to approximately $1 billion.
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Grayscale Investments’ BTC balance in GBTC is rapidly diminishing, possibly limiting Bitcoin price due to GBTC shares.
Grayscale Bitcoin Trust Assets Declining
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As a result of continuous outflows observed in Grayscale Investments’ GBTC, there has been a significant double-digit reduction in the amount of Bitcoin held in the trust, especially since it officially converted to a Bitcoin exchange-traded fund (ETF).
A new data analysis published by Glassnode highlights a significant decrease in assets of the Grayscale Bitcoin Trust ETF (GBTC). The current balance of the trust is approximately 553,000 Bitcoins, representing a substantial decline from the peak level of around 630,000 BTC, about 12%.
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A significant factor contributing to the decline in GBTC assets is the increased outflow volume, estimated to be around $3.5 billion, over the last seven trading days. The majority of these outflows are credited to FTX, which reportedly liquidated nearly two-thirds of GBTC assets in the first three trading days after transitioning to an ETF.
According to sources reported by Bloomberg, the crumbling crypto empire sold over two-thirds of its 22.28 million shares, amounting to approximately $1 billion. Grayscale Bitcoin Trust, established as a closed-end fund in 2013, operated under restrictions preventing investors from redeeming their shares.
However, after receiving approval from the U.S. Securities and Exchange Commission (SEC), the trust transformed into an exchange-traded fund (ETF). Following its commencement on January 11, this transition provided an opportunity for long-term investors like FTX to liquidate their positions.
On Tuesday, marked as the seventh trading day for all spot Bitcoin ETFs, GBTC experienced a significant outflow of approximately $600 million. Bloomberg Intelligence ETF analyst James Seyffart described this outflow as the largest seen since the trust began trading as a Bitcoin ETF.
Direction in Bitcoin could be further constrained
According to Chris Terry, the Bitcoin price will likely continue in a flat or downward trend until Grayscale Bitcoin Trust is completely liquidated – a process that will involve selling approximately $25 billion worth of Bitcoin in the coming weeks. Terry stated, “Bitcoin price will likely remain flat or downward until GBTC is liquidated, about $25 billion in sales over the next few weeks. Grayscale’s decision to keep ETF fees at 1.5% will go down as the biggest strategic mistake in crypto history.”
On Wednesday, Bitcoin is trading positively, returning to the $40,000 level, currently trading at $40,050. This recent price movement reflects a significant 2.73% increase in the last 24 hours but still represents a 6.24% loss over the previous seven days.
According to data, Bitcoin’s circulating supply is currently recorded as 19,606,918 BTC, emphasizing its significance within the cryptocurrency ecosystem. Additionally, Bitcoin’s market cap is a robust $783,930,244,546 as per the latest recording.