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How Bitcoin Price Will React As Grayscale’s Sell-Off Slows Down – BeInCrypto

Grayscales recently launched Bitcoin ETF, GBTC, is witnessing a gradual decline in outflows, as around $5 billion in digital assets are withdrawn from the fund.

Despite the substantial outflows, market analysts express optimism that the worst may be over. This sentiment suggests a potential positive shift in Bitcoins price performance.

In the wake of the US Securities and Exchange Commissions (SEC) recent approval of several spot Bitcoin ETFs, Bitcoin experienced a notable 20% decline. Significant outflows from Grayscale primarily fueled this downturn.

Analysts attribute the substantial outflows to profit-taking maneuvers by investors previously exposed to the funds discount. Additionally, there were indications that some traders were reallocating their investments away from GBTC due to its comparatively high fee.

GBTC currently charges a 1.5% fee, while competing ETFs such as BlackRocks IBIT have fees under 1%.

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 However, recent trends indicate a slowdown, with $255 million withdrawn on the eleventh day of trading, the lowest GBTC outflow since the first day of trading.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

Concurrently, the sell-off has led to a substantial reduction in Grayscales Bitcoin balance, which now stands at over 508,000 BTC, valued at $21 billion, according to Arkham Intelligence. It is worth noting that since the launch of spot Bitcoin ETFs, the fund has deposited 113,129 BTC into Coinbase, equivalent to $4.6 billion.

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

For instance, JA Maartun recently shared a chart illustrating the diminishing impact of Grayscale on BTC prices. Despite the sell-off, Bitcoins value not only remained stable but also demonstrated an impressive increase.

All selling pressure from Grayscale was absorbed and the price even managed to increase, which is impressive, Maartun said.

Another analyst, Ted, dismissed the narrative around GBTC selling as excessively sensationalized. His analysis revealed that the influx of Bitcoin into the market through nine new spot BTC ETFs surpassed the outflow from GBTC by over 120,000 BTC in the last 90 days.

In contrast, Resdegen highlighted Bitcoins resilience in trading above $41,000 despite the various selling pressures. The analyst pointed out significant factors, such as GBTCs substantial outflow, the US government announcement of selling $130 million worth of seized BTC, and Celsius movement of $1 billion in ETH, which seemingly had no adverse impact on the top cryptocurrency price.

Anticipating bullish signals on the horizon, Resdegen emphasized the potential for bears to face significant challenges, particularly with the upcoming BTC halving event.

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How Bitcoin Price Will React As Grayscale's Sell-Off Slows Down - BeInCrypto

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January 27th, 2024

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This is what was behind the bitcoin sell-off and why JPMorgan thinks it could be ending – CNBC

The driving force behind the recent sell-off in bitcoin may have run its course, according to JPMorgan. Bitcoin rallied in the second half of 2023 as optimism around the approval of exchange traded funds grew, but their debut earlier this month has proven to be a "sell the news" event for the world's largest cryptocurrency. Bitcoin briefly traded above $49,000 shortly before the funds launched, but then fell more than 20% before seeming to stabilize around $40,000. BTC.CM= YTD mountain Bitcoin has retreated since the approval of bitcoin ETFs. JPMorgan strategist Nikolaos Panigirtzoglou said in a note to clients Thursday that the main source of the selling has come from the Grayscale Bitcoin Trust (GBTC) . The fund, which traded at a steep discount as an over-the-counter product before investors became confident that a conversion to an ETF would happen, has seen heavy outflows over the past two weeks. "Profit-taking on previous GBTC investments, made at a discount to [net asset value] last year, has likely been a major driver behind bitcoin's correction; $4.3bn has thus far exited GBTC since its conversion to ETF," Panigirtzoglou said. Some outflows from GBTC were expected, given the prior discount and its high cost relative to other bitcoin ETFs. Panigirtzoglou, who had estimated $3 billion of outflows, said that the decline is likely profit taking rather than a sign that the cash is moving to other options, and that the outflows should slow from here. "We conclude that GBTC profit taking has largely happened already. In turn, this would imply that most of the downward pressure on bitcoin from that channel should be largely behind us," Panigirtzoglou said. Even with the outflows from GBTC, the fund still has about $20 billion in assets under management. And some of the other bitcoin ETFs are seeing big inflows, with funds from iShares ( IBIT ) and Fidelity Wise Origin ( FBTC ) both surpassing $1 billion in inflows. The total inflows and decline in price of bitcoin have missed the optimistic estimates of some crypto bulls, but the dollar amounts are still large compared to other ETF launches.