Grayscale Moves $183 Million in Bitcoin to Exchange, BTC Price Adjusts to $43,200
Following the first day of Bitcoin spot ETF trading, Grayscale has transferred $183 million worth of Bitcoin to Coinbase.
Grayscale Moves $183 Million in Bitcoin to Exchange, BTC Price Adjusts to $43,200. Photo: Grayscale Website
On the evening of January 12th, the cryptocurrency community circulated information indicating that Grayscale, one of the entities approved by the SEC for a Bitcoin spot ETF, moved $183 million worth of BTC to Coinbase.
Specifically, Grayscale sent a total of 4,000 BTC to Coinbase in individual transactions valued at 1,000 BTC each, according to data from Arkham.
Transactions transferring BTC to Coinbase by Grayscale on the evening of 12/01/2024. Source: Arkham
Bitcoin's price immediately reacted negatively to this news, dropping from $45,900 to $43,200.
Chart of BTC/USDT pair on Binance's 1-hour chart at 01:20 AM on 13/01/2024
The reason for Grayscale's Bitcoin transfer may be due to GBTC investors wanting to convert their ETF shares back into cash.
Unlike other Bitcoin spot ETF proposals that are newly established, Grayscale's GBTC has been in existence since 2015, providing U.S. investors with indirect access to the world's largest cryptocurrency. However, due to the inability to convert GBTC shares into physical Bitcoin, GBTC prices suffered significant declines and deviated from Bitcoin's market price during the 2021-2022 downtrend, with sell orders reaching over 45%.
Following Grayscale's legal victory against the SEC in August 2023 and approval to convert to a Bitcoin spot ETF, GBTC can now be converted to Bitcoin, opening up avenues for investors who have been "locked in" for years to convert their assets.
Aside from profit-taking, investors may also wish to switch to other Bitcoin spot ETFs with lower fees than GBTC's maximum market fee of 1.5%.
Comparison of recently approved Bitcoin spot ETFs by the SEC. Source: Bloomberg (11/01/2024)
Trading data from the first day of Bitcoin spot ETFs shows that GBTC shares accounted for $2.3 billion out of a total trading volume of $4.6 billion, but recorded an outflow of funds amounting to $95 million. It was the only ETF among the 11 products to report negative inflows, further substantiating the investor withdrawal hypothesis.
ETF Day 1 Flow - UPDATE
— BitMEX Research (@BitMEXResearch) January 12, 2024
Finally the GBTC number is out. GBTC has $95m of outflow
Total net flow for the day into the new ETFs was $625.8m
Bitwise was the victor for day 1 pic.twitter.com/HFsqhjtvEt
According to Arkham, Grayscale's wallet addresses currently hold over 621,000 BTC as collateral for the GBTC fund, valued at $27.2 billion. Additionally, the entity holds $7.8 billion worth of Ethereum as collateral for ETHE shares and a small amount of other altcoins, with a total portfolio value nearing $35 billion as of January 12th, 2024.
List of assets held by Grayscale as of the evening of 12/01/2024. Source: Arkham
Ethereum's price, on the other hand, was less affected, partly due to the optimistic sentiment in the cryptocurrency market regarding the potential introduction of an Ethereum spot ETF, especially following comments from BlackRock CEO Larry Fink on the evening of January 12th.
Chart of ETH/USDT pair on Binance's 1-hour chart at 01:25 AM on 13/01/2024
