Home News Is Bitcoin in danger of losing $30K with Grayscale’s big GBTC unlocking?

Is Bitcoin in danger of losing $30K with Grayscale’s big GBTC unlocking?


The sale of shares in a large Bitcoin trust from Grayscale in July could be a new source of pressure on the price of the cryptocurrency.

The bitcoin rate has recovered above $ 35,000, but analysts continue to adhere to exclusively bearish forecasts. Experts note that weak cash flows in GBTC in aggregate to the approaching expiration of semi-annual shares will hit the price of the first cryptocurrency.

In the event of a sale of shares, Grayscale will drop 16,200 BTC into the market. This will be the first batch of 41,800 Bitcoin expiring before the end of July. If the cryptocurrency is sold, it will be a signal that all other investors can do the same. Such a forecast will lead to speculative closing of positions in the cryptocurrency “ahead of the curve”.

Grayscale Bitcoin Trust

The Grayscale Bitcoin Trust (GBTC) is a fund that allows investors to access Bitcoin through traditional financial instruments (stocks). The investor can give the manager fiat currency or bitcoins, in exchange for receiving the fund’s shares. With all the funds, the trust manager buys Bitcoins and keeps them at home. That is, the shares are tied to real BTC in Grayscale vaults, but investors have no direct connection with them.

At the moment, Grayscale already has 654,600 BTC at its disposal. Thus, investors buy Bitcoins through a share in the fund – stocks. There is only one peculiarity: they cannot get back their invested funds. They have the option to sell shares on the secondary market.

There is another feature of the Grayscale Bitcoin fund – shares become available for sale in the secondary market only six months after investing in the fund.

Note that starting from February 19, GBTC reserves began to decline. Since then, the volume of Bitcoin managed by Grayscale has decreased by 4,000 BTC (~ $ 176 million at the average rate).

In addition, approximately since then, the trust margin has been in the red. At the time of this writing, GBTC margins remain at -12%. Some investors have already expressed their displeasure.

Which way will Bitcoin turn?

The Grayscale Trust was particularly popular about six months ago. In December, $ 2 billion was invested in the fund, in January – $ 1.7 billion. Investors’ shares, respectively, will be unfrozen in July 2021.

Once investors receive the shares, they will be able to sell them on the secondary market. According to JPMorgan, this will have an impact on the Bitcoin market, and not just on GBTC stock.

It is also worth noting that investors can sell GBTC shares and use the proceeds from this operation for reinvestment. That is, they will buy Bitcoin on the market and invest again in the Grayscale fund.

Thus, some analysts believe that this event will displace sellers from the market in July, triggering both volatility and bullish potential to reach new all-time highs. Although JPMorgan experts continue to insist on their own, that is, they do not want to give up their negative forecast for Bitcoin and the cryptocurrency market in general.

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