The multibillion-dollar outflows from Grayscale’s Bitcoin Trust (GBTC) have significantly impacted Bitcoin’s market, driving its price below $39,000 for the first time in nearly two months.
Following its conversion to a spot Bitcoin exchange-traded fund (ETF) on January 11, GBTC has experienced over $3.4 billion in outflows. Grayscale has been transferring substantial amounts of Bitcoin to Coinbase Prime, presumably for sale, contributing to these outflows.
The situation has raised concerns about the longevity of this exodus from GBTC. Bloomberg ETF analyst Eric Balchunas pointed out that GBTC saw outflows of $515 million on January 23, amounting to 13% of its shares outstanding. Although recent data suggests a slowdown in outflows, the future remains uncertain.
In a poll conducted on X (formerly Twitter), nearly half of the participants anticipated that the outflows could reach 35–50%. However, Balchunas and his colleague James Seyffart estimate that the tipping point might be around 25% of outstanding shares. Currently, Grayscale’s website reports 600.5 million shares outstanding, with 536,694.9 Bitcoin in trust, and data from CC15Capital indicates that 82,525 Bitcoin have left GBTC since January 10.
The recent outflows are partly attributed to the defunct crypto exchange FTX, which reportedly sold two-thirds of its 22.3 million shares in GBTC over three days. FTX is believed to still hold about eight million shares, valued at approximately $281 million. Additionally, there’s growing concern that Bitcoin from the Mt. Gox settlement may soon enter the market, as the Mt. Gox trustee has reportedly been contacting creditors for identity verification to set up crypto exchange accounts for repaying Bitcoin and Bitcoin Cash, potentially exerting further downward pressure on Bitcoin’s price.
As of now, Bitcoin is trading at $39,949, showing a slight increase of 0.60% on the day, based on CoinMarketCap data. The Crypto Fear & Greed Index, a measure of market sentiment, recorded a 100-day low of 48 on January 24, reflecting the cautious and uncertain mood in the cryptocurrency market.
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