GBTC, Grayscale’s Bitcoin ETF, is grappling with massive outflows. How this came about and why the trend could soon be over.
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Grayscale’s Bitcoin ETF finds itself grappling with substantial selling pressure, as almost 19,200 Bitcoins, equivalent to around $770 million, moved from GBTC to Coinbase in a single trading day.
However, not all transactions should be interpreted as outright outflows, clarifies the analysis platform Arkham on X (formerly Twitter). According to Arkham, the outflows are divided between Coinbase Prime and new GBTC depository addresses, indicating that not all BTC will be withdrawn. These transactions appear to be settlements related to trading activities from previous days.
Arkham suggests that only “75 percent” of the outflows, approximately 14,400 BTC, represent actual payouts. Yet, data on Bitcoin outflows varies significantly, with the crypto exchange Bitmex’s data service estimating a volume of around $425 million. Bloomberg analyst Eric Balchunas anticipates the selling trend slowly tapering off.
Some market observers attribute the fall in Bitcoin’s price to the GBTC sell-off, with the cryptocurrency experiencing an almost 18 percent drop since the ETFs commenced trading, resulting in a market capitalization loss exceeding $115 billion during this period.
Contrary to this viewpoint, CryptoQuant CEO Ki Young Ju challenges the narrative on X, asserting that the decline in Bitcoin’s price is primarily due to a sell-off in the derivatives markets. Despite a high level of off-exchange activity, Ki emphasizes that this is not reflected in the overall price.
Despite the challenges faced by Grayscale, other Bitcoin ETFs are enjoying robust trading. With the exception of Grayscale, volumes from providers like BlackRock are on the rise. Many investors had anticipated ETFs to act as price catalysts, but these financial products have yet to fully live up to expectations.
