Grayscale continues to sell off as Bitcoin price again loses $40k.
Crypto markets rumbled in the days leading up to the release of Bitcoin by the industry's largest digital asset manager, Greyscale. Bitcoin continues to fall below $40,000, but most of Greyscale's outflows are concentrated by other fund managers, so why are traders selling their coins?
Grayscale has been selling Bitcoin since US regulators approved the BTC exchange on January 11th.
Shares of Grayscale Bitcoin ETF continue to sell off.
On January 11, the firm saw more than $3.3 billion in spending since GBTC was allowed to convert its funds into the spot Bitcoin ETF. In addition, he is putting large amounts of Bitcoin into Coinbase in preparation for further sales.
The grayscale exodus is mostly due to investors rebalancing their portfolios and entering at lower fees for better returns.
On January 24, CC15Capital posted updates on Bitcoin ETF holdings.
“Stop panic selling your Bitcoin just because you see tweets every morning about GBTC coins being sent to Coinbase.”
He added that all the bitcoins sold by Greyscale so far have been collected by other (low-fee) ETFs.
BlackRock and Fidelity were the biggest buyers of Bitcoin, holding 39,925 and 34,127 BTC, respectively, as of January 22. However, Grayscale unloaded 82,525 BTC during the same period.
Read more: What is a Bitcoin ETF?
However, the total amount of BTC bought in the newly launched space ETFs, excluding Grayscale, remains a positive figure at 25,938 coins, according to CC15Capital.
On January 24, ETF analyst Eric Balchunas conducted a poll to gauge when people think grayscale will stop selling.
“GBTC has cleared 13 percent of the stock. How high do you think this number was before mass immigration stopped?
About half of the respondents voted for the 35%-50% choice, suggesting that sentiment is bleak.
He added that both he and another analyst, James Seifert, think it will be around 25%.
“But this is not something I will do.[t] Sushi lunch is over, so much unknown.
According to its website, the Greyscale Bitcoin Trust holds 536,694 BTC with an estimated value of $21.3 billion. So the sale is probably over.
However, the lower BTC price will be good news for other ETF issuers and investors waiting to buy the dip.
Purchasing power
ETF Store President Nate Gerasi commented:
“A firm like Grayscale makes a lot of sense for a traditional ETF issuer, assuming that its strategic acquisition is undervalued.”
Seifert backed the idea that a big player could acquire a crypto asset manager:
“It's theoretically possible for someone to get grayscale, but it might take longer, especially with current issues with their parent company.”
Meanwhile, the price of Bitcoin has once again lost $40,000. At the time of writing, they were down 0.8% on the day at $39,710.
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