Grayscale Bitcoin Trust ETF Moves $41M to Exchange During Price Crash in BTC – Arkham
The Greyscale Bitcoin Trust (GBTC) moved 894 Bitcoin (BTC) (worth $41 million at the time of the transfer) to a Coinbase Prime wallet on January 12. The move came the day after the trust launched for authorized participants to buy Bitcoin. Some of the X (formerly Twitter) accounts speculate that GBTC redemptions are responsible for Bitcoin's price decline, even though the amount has so far been a smaller percentage of Grayscale's total assets.
In addition to the $41 million going to Coinbase, another $119 million was sent to wallets with no history.
The Greyscale Bitcoin Trust is often believed to be one of the largest single holders of Bitcoin in the world. In a social media post on September 6, Arkham said the trust holds more than $16 billion worth of cryptocurrency. According to Current Arkham data, the price of Bitcoin has increased over the past few months.
Shares of GBTC have been traded since 2013 but were not redeemable for Bitcoin until January 11th. Because the shares are non-refundable, they often trade at a significant discount to their net asset value or the value of the Bitcoin they represent. For example, in October, each share of the stock was worth 16% less than the amount of bitcoin it represented.
On January 12, the day several Bitcoin ETFs began trading, data from Arkham Intelligence showed that the trust sent 894 BTC to Coinbase in one transaction and another 2,607 BTC to other wallets in three separate transactions. The amount sent to Coinbase represents an outflow of $41 million, or approximately 0.15% of Greyscale Trust's total holdings, while flows to other wallets account for an additional $119 million, or 0.44%.
Related: Grayscale Court Decision Was Key to Bitcoin ETF Approval, Gary Gensler Says
On the same day as these flows, the price of Bitcoin went into a sudden slump, falling from roughly $46,000 to as low as $43,000 at 6:47 pm UTC. The decline resulted in a break of the strong support line at $44,740.
Despite the small outflows seen in Arkham, some X users have speculated that the decline may have been caused by redemptions of GBTC shares as owners of these shares finally got a chance to cash out. Anonymous crypto trader Fomocap posted a picture of Bitcoin's falling price with the caption: “People are selling $25B worth of GBTC, welcome to EFF.” He said.
People are selling $25b of GBTC, welcome to ETF pic.twitter.com/TQjZH3fXzs
— Fomocap (@fomocapdao) January 12, 2024
Napatadamus made a similar claim, saying, “Less than $1B of the $28B has been shipped so far,” adding, “Looooong way down.” As evidence for their theory, Napatadamus posted a link to the Arkham page for the Greyscale Bitcoin Trust.
CNBC's Crypto Trader host Ran Nunner agreed with the theory, posting to X that “People are dumping their GBTC holdings and the price of Bitcoin is going down.”
As people dump their GBTC holdings, the value of Bitcoin is flowing.
GBTC held $25 billion worth of bitcoins that had been locked up for years with no option to sell. As soon as the redemption option opens, people are starting to withdraw for the first time – withdrawing from Bitcoin… pic.twitter.com/EqHgpHyVdd
— Ran Nooner (@cryptomanran) January 12, 2024
In his post, Neuner warned that bitcoin “could see some selling pressure for some time because $25 billion is a serious number and even if it only redeems 20%, that's a $5 billion selloff in the market.”
Grayscale has never made his wallet address public, so Arkham could be wrong about which wallets it trusts, so the outflows could be more or less than Arkham's data shows.
