• Thu. Feb 22nd, 2024

FTX has sold $1 billion of shares from the Grayscale Bitcoin Trust (GBTC), marking a big move in the cryptocurrency industry. This significant transaction is considered a noteworthy element that may lessen the selling pressure on Bitcoin and change the market’s dynamics.

FTX sold out its 22 million units of GBTC shares, worth approximately $1 billion. The recent sales accounts for almost $2 billion in outflow from the Grayscale BTC ETF since its launch on January 11. The sale accounts for about half of this outflow, indicating a substantial reallocation of positions and a change in market sentiment.

A court filing from October 25 of last year said that FTX has about 22.3 million GBTC shares. These shares, valued at $1 billion, were recently divested, indicating a significant decrease in their exposure to the Grayscale Bitcoin Trust. This action is FTX’s strategic choice to reallocate resources or control risk in light of the bitcoin market’s changing conditions.

Grayscale Witness Significant Withdrawal from it’s Bitcoin ETF

In light of FTX’s significant share sale and the major withdrawals from the Grayscale Bitcoin ETF, concerns over the variables impacting institutional investment strategies in the cryptocurrency market are raised – one of them being the selling pressure on Bitcoin, which is seen in the withdrawals from the Grayscale Bitcoin Trust.

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Because of their significant influence over market patterns, institutional investors’ actions frequently ripple across the bitcoin ecosystem. CoinDesk also reported that FTX’s Grayscale BTC value increased to about $900 million on the first day the Grayscale BTC ETF traded on NYSE Arca on January 11. 

According to FTX filing made on November 3, 2023, FTX has shares in five different Grayscale trusts, held in ED&F Man Capital Markets brokerage account. It has about 3 million share units in statutory trust, which is also managed by Bitwise, an ETF provider. 

Grayscale Cumulative Inflow for Spot BTC ETFs Reaches $553 Million

The cryptocurrency analyst Lockridge Okoth had written on the Inside Bitcoins platform that investors look forward to seeing GBTC ETF outflows ease so that the FTX liquidators can be out of the picture.

Okoth adds that should this happen, it will affect the downward pressure of the Bitcoin price. On Monday, the two major rivals, Fidelity and BlackRock, witnessed $158 million and $260 million inflows, respectively.

The cumulative subtraction in inflow for other Grayscale spot BTC ETFs reached $553 million. Aside from the sales of the FTX assets, Grayscale’s high transaction fees were also linked to the company’s recent redemption. Data shows that Grayscale’s fee is 1.5%, compared to that of BlackRock, which is 0.25%.

FIT Surges 300% in Trading Volume, Major Industry Players Linked 

The $1 billion sale by FTX of Grayscale Bitcoin ETF shares adds a noteworthy element to the continuing story of institutional involvement in the cryptocurrency space. The choices made by significant players in the market, such as FTX, are believed to have a long-term effect on the cryptocurrency landscape, affecting both the short-term and long-term price movements of digital assets.

The recent sell-off has increased FTX creditor’s hopes of getting compensated, making the FIT token one of the few cryptocurrencies to gain traction in the past 24 hours. The positive performance also affected the trading volume, as it was reported to have surged by 300%. Historical analysis of FIT shows it has remained speculative since the collapse of FTX.

Maria Bartiromo

Maria Bartiromo

Maria Bartiromo is a renowned news writer and journalist, celebrated for her insightful reporting and authoritative voice. With a career spanning years, she has established herself as a trusted source of accurate and comprehensive news analysis, keeping readers informed on vital global developments.

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