Bitcoin Falls to $40,700 as Grayscale's GBTC Conversion Pressure Persists
Despite surpassing $14 billion in trading volume, Bitcoin spot ETFs are facing significant conversion demands from Grayscale.
Chart: 1-hour BTC/USDT on Binance as of 07:15 AM, January 19, 2024
Late on January 18 and early January 19, the Bitcoin market witnessed a new correction, pushing BTC down to $40,700 from $42,800, its lowest since December 18.
The exact reason for this decline remains unclear amidst varied opinions on social media. However, the prevailing argument suggests Grayscale's selling of BTC to meet asset conversion demands from investors.
At 22:16 UTC+8, 9,840 BTC (worth $418 million) was transferred from the Grayscale Trust address to Coinbase Prime. The Grayscale Trust address has transferred a total of 41,478 BTC (valued at $1.784 billion) to Coinbase Prime during the opening hours of the US stock market for 4… https://t.co/zKU6t2DDjw
— Wu Blockchain (@WuBlockchain) January 18, 2024
On the evening of January 18, Grayscale transferred an additional 9,840 BTC to Coinbase, bringing the total Bitcoin transferred to the exchange since the Bitcoin spot ETF trading opened to 41,478 BTC (worth $1.78 billion).
This marks the fourth consecutive trading day of BTC transfers by Grayscale, following movements on January 12 (4,000 BTC - $183 million), January 16 (9,000 BTC - $384 million), and January 17 (18,638 BTC - $791 million).
Grayscale currently holds nearly 618,000 BTC, valued at $25.5 billion.
As explained by Coin68, investors holding Grayscale's GBTC are seeking ways to exit the trust, partly to realize profits after holding since 2021-2022, and partly to avoid Grayscale's high 1.5% annual management fee by transitioning to other ETFs.
By the end of trading on January 18 (US time), the 11 SEC-approved Bitcoin spot ETFs from the previous week recorded a trading volume of $2.1 billion, bringing the total volume over the past five days to $14 billion.
This is interesting, the Newborn Nine actually saw a 34% jump in volume today vs yesterday. Normally with a hyped up launch you see volume steadily decrease each day post-launch, rare to see it reverse back up. All but one saw jump too but GBTC change flat so wasn't a volatility… pic.twitter.com/f6xOsLRWjr
— Eric Balchunas (@EricBalchunas) January 18, 2024
Drew Kellerman provided the daily wrap-up for The Market Open, noting that...
Cash flow data indicates that GBTC recorded an outflow of up to $582 million on January 18.
Day 5 #Bitcoin ETF Cointucky derby update. Waiting on data from $IBIT/BlackRock and $BRRR/Valkyrie. But $GBTC with another Big outflow – $582 million. Total out of GBTC is $2.2 billion so far. pic.twitter.com/XxXfyJCA60— James Seyffart (@JSeyff) January 19, 2024
Day 5 #Bitcoin ETF Cointucky derby update. Waiting on data from $IBIT/BlackRock and $BRRR/Valkyrie. But $GBTC with another Big outflow -- $582 million. Total out of GBTC is $2.2 billion so far. pic.twitter.com/XxXfyJCA60
— James Seyffart (@JSeyff) January 19, 2024
