FTX Estate Sells Majority of Greyscale Bitcoin Trust Shares: Report
Failed crypto exchange FTX and hedge fund Alameda Research sold more than two-thirds of Grayscale Bitcoin Trust (GBTC) shares, according to a January 22 report from Bloomberg. The report cited “two people familiar with the matter” as sources. FTX Estate may have raised at least $600 million as a result of the sale.
#FTX Shocks Market With $1B #Grayscale ETF Selling & Alameda Drops Bombshell Allegation on Grayscale! $GBT
• FTX bankruptcy assets drop Greyscale's Bitcoin ETF by nearly $1 billion, shedding light on recent GBTC flows
— RichQuack (@RichQuack) January 22, 2024
The report says FTX Estate held 22.28 million shares of the grayscale bitcoin trust (worth $902 million at the time) before January 11. In the next three days of trading, “more than two-thirds” of the shares were sold in FTX, which currently has less than 8 million shares valued at $281 million.
Alameda Research sued Grayscale in March over alleged overpayments. As part of the lawsuit, Alameda claims that Greyscale is issuing a “self-imposed redemption ban” that prevents shareholders from buying bitcoin (BTC) held in its trust. Prior to January 11th, most investors had no way to redeem their shares for the trust's underlying Bitcoin, and the trust's share price was 44% below the value of bitcoin as of June 15th.
Related: Bitcoin and ETF traders are overstating the impact of the GBTC selloff
However, after the United States Securities and Exchange Commission approved Grayscale Trust's conversion to an ETF, redemptions for authorized participants opened on January 11. As the expected approval date approaches, GBTC's share price declines to 1.55% of net asset value, according to data from Ycharts. This caused the value of these shares to match the value of the bitcoins they represented. GBTC is now 0.27% below its asset value per share.
More than $700 million worth of Bitcoin has been sold by the Grayscale Bitcoin Trust since January 11, with some analysts saying investors are fleeing the money due to what they see as high payouts. On January 22, Alameda dropped the charges against Grayscale.
