Analysis: BTC price crash due to GBTC ETF sales – what’s behind it?

Analysis: BTC price crash due to GBTC ETF sales – what’s behind it?

According to a report by www.btc-echo.de,

A rain of money was expected and the Godcandle would reach over $100,000 per Bitcoin. The reality is different: Bitcoin has fallen by almost 15 percent since the spot ETFs started trading. At the time of writing, the crypto reserve currency is trading at $38,910.

FTX sells GBTC shares and depresses Bitcoin price

The Grayscale Bitcoin Trust (GBTC) continues to generate enormous selling pressure. The investment product has been around since 2013. It was converted into an ETF on January 10th. Investors who invested early are now looking to reap profits, Bloomberg data shows. According to this, around 640 million US dollars flowed from the GBTC ETF on January 22nd alone. The total outflow since the start of trading at GBTC is around 3.4 billion US dollars. Almost a third of this sale is credited to FTX. The insolvent crypto exchange sold around 22 million GBTC shares, worth around a billion US dollars.

BlackRock, Fidelity and Co. are opposing this

The GBTC outflows are massive - but so are the inflows into the Bitcoin spot ETFs from BlackRock, Fidelity and Co. As data from BitMEX Research shows, there were outflows of just $87 million on the seventh ETF trading day yesterday. BlackRock, Fidelity and Bitwise – the three largest ETFs after GBTC – also total $3.4 billion. If you include the smaller ETFs, the total inflow, minus GBTC outflows, is $1.1 billion.

Accordingly, the ETF providers bought 24,067 BTC in the last seven trading days, it is said. Grayscale sold over 80,000 BTC due to the massive GBTC outflows.

Analysis and impact on the market

The massive outflows in GBTC and the associated weakness in the Bitcoin price could lead to a further decline in the price in the short term. However, the purchases of the largest ETFs after GBTC could indicate that many institutional investors are viewing the current price decline as an entry opportunity. This could support the course in the future. Nevertheless, developments on the ETF market are of great importance for the price development of Bitcoin.

It remains to be seen what the next steps of the ETF providers and the reaction of investors will be. The fluctuations and changes in the Bitcoin ETF market will significantly influence the future development of Bitcoin's price.