KEY POINTS
- FTX reportedly offloaded 22 million GBTC shares
- The sell-off was valued at around $1 billion
- As of 5:02 p.m. ET on Monday, Bitcoin's trading price declined to $39,933.65
The estate of the bankrupt crypto exchange platform FTX has been identified as a primary driver behind the notable decline in the Grayscale Bitcoin Trust ETF's assets.
Reports indicate that FTX, in a significant move, divested nearly two-thirds of its GBTC holdings within the first few trading days of the fund's operation as an ETF.
The FTX estate executed a significant liquidation of its investment in the Grayscale Bitcoin Trust ETF. This move was carried out in the initial three days of the ETF's trading, with Marex Capital Markets overseeing the transaction.
FTX disposed of over two-thirds of its 22.28 million shareholdings in the trust, as reported by Bloomberg, which cited people "who asked not to be named because the matter hasn't been made public."
During the last five trading sessions, the Grayscale Bitcoin Trust ETF experienced a marked increase in both outflows and trading activity.
This period saw investors actively seeking to exit the fund, culminating in an estimated total capital withdrawal of approximately $2.2 billion.
The recent sell-off by FTX, which involved a substantial 22 million shares, as reported by Coindesk, was valued at nearly $1 billion.
This major divestment notably accounted for a significant portion of the Grayscale Bitcoin Trust's (GBTC) recorded outflows, which exceeded $2 billion in the past five trading sessions.
Initially established in 2013 as a closed-end fund, the Grayscale Bitcoin Trust restricted investors from redeeming their shares.
However, with the approval of the U.S. Securities and Exchange Commission (SEC), the trust was converted into an exchange-traded fund (ETF). And when it started trading on Jan. 11, it allowed long-time investors like FTX to exit their positions.
Gabor Gurbacs, advisor of Tether and VanEck, noted that spot Bitcoin ETFs demonstrated remarkable resilience in swiftly absorbing the substantial FTX GBTC estate sale.
"Seems like Bitcoin ETFs absorbed the FTX GBTC estate sale pretty quickly and without a large impact. Estate sales are no longer a catastrophe. Bitcoin is flowing from weak hands to strong hands. Glad we made the ETFs possible. It changes the game and tames downside volatility," the executive wrote in a post on X.
Seems like Bitcoin ETFs absorbed the FTX GBTC estate sale pretty quickly and without a large impact.
— Gabor Gurbacs (@gaborgurbacs) January 22, 2024
Estate sales are no longer a catastrophe. Bitcoin is flowing from weak hands to strong hands. Glad we made the ETFs possible. It changes the game and tames downside volatility.
As of 5:02 p.m. ET on Monday, Bitcoin's trading price declined to $39,933.65, with the 24-hour trading volume reaching $30.08 billion.
This latest pricing reflects a notable decrease of 4.81% in the past 24 hours and a 6.83% reduction over the last week.
Presently, Bitcoin's circulating supply is 19.61 million BTC, and its market capitalization stands at $780.01 billion, as per the most recent data from CoinMarketCap.
