Coindesk reported on Monday night that FTX has sold nearly $1 billion worth of GBTC shares since the conversion of Grayscale’s GBTC to a Bitcoin spot ETF. Since the approval of the Bitcoin spot ETF by the U.S. Securities and Exchange Commission (SEC), the price of BTC has been steadily declining from its high point of $48,969 on the 11th. In the early morning of the 23rd, it fell below the $40,000 mark and is currently fluctuating around $39,750.
According to insiders, the recent decline in the price of Bitcoin is believed to be related to Grayscale GBTC investors liquidating their positions after the premium approached zero. On the night of the 22nd, Coindesk revealed, based on its reviewed private data and information from two insiders, that among the large-scale sellers of GBTC were FTX’s bankruptcy liquidation team, who sold approximately 22 million shares of GBTC, worth nearly $1 billion, effectively liquidating most of their GBTC holdings.
According to legal documents filed by FTX on November 3, 2023, as of October 25, 2023, FTX held 22.3 million shares of GBTC, valued at nearly $600 million. On the first day of trading after GBTC transitioned to a Bitcoin spot ETF on the 11th of this month, the value of FTX’s GBTC holdings rose to around $900 million, with a closing price of $40.69.
Bloomberg today cited insiders’ statements, stating that FTX sold over two-thirds of its total holdings of 22.28 million shares within the first three trading days of GBTC’s transition to an ETF, with an estimated amount exceeding $600 million.
Perhaps due to the premium approaching zero, Alameda Research, an affiliate of FTX, also withdrew the lawsuit accusing Grayscale of charging excessive fees for GBTC on Monday.
According to Coinshares data, over $2.9 billion has been withdrawn from GBTC since its transition to a spot ETF. Currently, Grayscale’s official website shows that GBTC still manages over $22.1 billion in assets.
However, investors may breathe a sigh of relief if FTX has indeed sold almost all of its GBTC holdings, as it could potentially eliminate a major source of selling pressure on GBTC in the future.
Chris J Terry, Chief Architect of BTCdata, warned on the 21st that the price of Bitcoin will continue to stagnate or decline until GBTC liquidation is completed. Grayscale’s decision to maintain the ETF management fee at 1.5% will be the biggest strategic mistake in the history of cryptocurrency.
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