Summary
The poor price performance of Bitcoin since the debut of US-based spot ETFs can be partly attributed to sizable sales of Bitcoin from the Grayscale Bitcoin Trust (GBTC). GBTC held around 567,000 Bitcoin as of January 19, down from nearly 620,000 prior to the launch of the ETFs on January 11. While the new spot ETFs have gathered more than 94,000 Bitcoin and $3.9 billion in assets under management since opening for trade, critics argue that 53,000 of those tokens may just be GBTC holders moving their money into the lower-cost ETFs. Additionally, the bankruptcy estate for failed crypto exchange FTX reportedly sold its entire 22 million share holding of GBTC, equivalent to almost 20,000 Bitcoin, for nearly $1 billion. This suggests that the inflows into the new ETFs were not merely recycled funds from GBTC. As of now, sellers of Bitcoin continue to dominate, with the price lower by 2.8% over the past 24 hours at $40,400.
Key Points
1. The poor price performance of bitcoin since the debut of U.S.-based spot ETFs can be attributed, at least partly, to sizable sales of bitcoin from the Grayscale Bitcoin Trust (GBTC). The GBTC held roughly 567,000 bitcoin as of Jan. 19, down from just shy of 620,000 prior to the Jan. 11 launch of the ETFs.
2. While the new spot ETFs have gathered over 94,000 bitcoin and $3.9 billion in assets under management since opening for trade, it is pointed out that 53,000 of those tokens may be GBTC holders moving their money into the lower cost vehicles. GBTC charges a 1.5% management fee, which is higher than most of the new funds.
3. The bankruptcy estate for failed crypto exchange FTX sold its entire 22 million share holding of GBTC (equivalent to almost 20,000 bitcoin) for nearly $1 billion. This news indicates that more than one-third of the selling of GBTC was due to one non-economic actor, and there was nearly $1 billion more of fresh investment into the new spot ETFs than previously thought.