Table of Contents
GBTC After ETF Approval- FTX Estate’s $1 Billion GBTC Sell-Off Amid Bitcoin’s Price Decline
GBTC After ETF Approval- Amidst the aftermath of Grayscale Bitcoin Trust (GBTC) transitioning into an ETF and facing stiff competition from new players like BlackRock and Fidelity, investors have swiftly divested over $2 billion in GBTC shares. The latest blow comes from FTX’s bankruptcy estate, which recently offloaded a substantial 22 million shares, contributing significantly to the $2 billion total sell-off.
Having been a stalwart in the cryptocurrency space for a decade, GBTC once held nearly $30 billion in assets. However, since its conversion into an ETF, it has witnessed an unexpected exodus of investments, in stark contrast to the popularity gained by new funds. The perceived culprit behind this mass withdrawal is believed to be GBTC’s comparatively high fees.
In a recent twist, #investors withdrew over $2 billion from #Grayscale's #Bitcoin Trust (#GBTC) post its #ETF transformation.#FTX's strategic liquidation of 22 million #shares, coupled with Grayscale's move to transfer $900 million worth of #BTC to #Coinbase, paints a complex… pic.twitter.com/70ukwVDQU5
— Unlock Blockchain (@unlockbc) January 23, 2024
In a notable move, FTX executed a complete divestment of its GBTC shares, amounting to around $1 billion. This divestiture coincided with a decline in Bitcoin’s price, challenging the anticipated positive impact that Bitcoin ETFs were expected to bring to the cryptocurrency’s market value.
GBTC After ETF Approval- FTX’s Profit Strategy and Legal Developments: Alameda Research Drops Lawsuit Against Grayscale
FTX’s profit strategy involved capitalizing on the variance between Grayscale trust shares and the actual value of Bitcoin. At its zenith, the value of FTX’s GBTC holdings reached approximately $900 million. FTX maintained a diverse portfolio, holding shares in various Grayscale trusts along with a Bitwise trust managed by ED&F Man Capital Markets (now Marex Capital Markets), who chose not to provide comments on the matter.
GBTC After ETF Approval- An interesting legal twist unfolded as Alameda Research, an entity connected to FTX, decided to drop a lawsuit against Grayscale. The lawsuit, centered around alleged high fees, coincided with the launch of Grayscale’s ETF. Notably, this development occurred concurrently with FTX actively divesting its GBTC shares, marking a strategic shift amid evolving dynamics in the cryptocurrency market.
For any queries and suggestions contact us here.
