How will the price of Bitcoin react when Greyscale’s sales decline?

Greyscale's recently launched Bitcoin ETF, GBTC, has seen a gradual decline in outflows as nearly $5 billion of digital assets exit the fund.

Despite the high cost, market analysts express hope that the worst may be over. This sentiment suggests a possible positive change in Bitcoin's price performance.

The flow of bitcoins will slow down

Following the US Securities and Exchange Commission's (SEC) recent approval of several Bitcoin ETFs, Bitcoin experienced a significant 20% decline. Significant outflows from grayscale have primarily exacerbated this decline.

Analysts attributed the high cost to profit-taking strategies by investors who had previously been exposed to the fund's decline. Additionally, there have been indications that some traders are shifting their investments away from GBTC due to relatively high fees.

GBTC currently charges a fee of 1.5%, while competing ETFs such as BlackRock's IBIT charge less than 1%.

These factors played a key role in the initial outflow from the fund. However, recent trends indicate a slowdown, with $255 million outflows on the 11th trading day, the lowest GBTC flow since the first day of trading. Still, according to BitMEX Research, total outflows from the fund are over $5 billion.

Likewise, the sale significantly reduced Greyscale's Bitcoin balance, which is now estimated at more than 508,000 BTC, valued at $21 billion, according to Arkham Intelligence. Since the launch of Bitcoin ETFs, the fund has transferred 113,129 BTC to Coinbase, which is equivalent to $4.6 billion.

BTC value is returned

Market analysts interpret the decline in GBTC outflows as a positive indicator of Bitcoin's price trajectory.

For example, JA Maartun recently shared a chart showing the impact of Greyscale on BTC prices. Despite the sell-off, the price of Bitcoin has not only remained stable, but has seen a dramatic increase.

“All the selling pressure from the grayscale has been taken away and the price has even increased, which is amazing,” Martin said.

Another analyst, Ted, dismissed the narrative surrounding the GBTC selloff as overly sensational. His analysis shows that in the last 90 days of Bitcoin entering the market in nine new positions BTC ETFs have exceeded GBTC outflows of 120,000 BTC.

Conversely, Resdegen highlighted Bitcoin's resilience in trading above $41,000 despite various selling pressures. The analyst pointed to significant factors such as the massive outflow of GBTC, the US government's announcement of the sale of $130 million worth of BTC, and Celsius' $1 billion move in ETH, which did not seem to have a negative impact on the top cryptocurrency's price.

Anticipating bullish signs on the horizon, Resdegen emphasized that bears may face significant challenges, especially with the upcoming BTC halving event.