More $376 million in Bitcoin is transferred by the Grayscale Bitcoin Trust ETF as the price stabilizes

January 19, 2024

By Anjali Kochhar

Data from blockchain analytics company Arkham Intelligence shows that on January 16, the Grayscale Bitcoin Trust (GBTC) moved 8,730 Bitcoin BTC $42,599, valued over $376 million, to Coinbase Prime deposit accounts.

The transactions suggest that when the fund’s share price dropped, it might have been obliged to sell off some of its Bitcoin holdings.

The price of Bitcoin has been declining over the previous few days, and some analysts have suggested that this is partly due to withdrawals from the trust. During the US trading day on January 16, the price of Bitcoin has steadied despite the draws.

One of the biggest single Bitcoin holders in the world is the Grayscale Bitcoin Trust. Before January 11th, most fund investors could not exchange their shares for Bitcoin or cash equivalents. However, the trust was changed into an exchange-traded fund (ETF) on January 11.

Since then, investors have been able to purchase shares from approved parties and exchange them for the cash equivalent of the Bitcoin that these shares represent. The trust must then sell off Bitcoin to pay these recipients when they do so. Usually, this procedure is only carried out when the value of the BTC that GBTC represents is greater than its price.

The trust moved $41 million to a Coinbase Prime wallet on January 12, according to Arkham data, which suggests that the trust might have sold Bitcoin. Some traders conjectured that this outflow could have caused the steep decrease in Bitcoin’s price that day.

Bloomberg analyst Eric Balchunas stated on January 12 in a post on X (previously Twitter) that by the close of trading, the Grayscale Bitcoin Trust had lost $95.1 million on January 11 and $484.1 million on January 12. Bloomberg Terminal was mentioned as the source by Balchunas.

Balchunas further asserted that inflows totaling close to $1.4 billion were made into other Bitcoin ETFs, including the iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund during these two days. This suggests that over the first two days of trading, the U.S. spot Bitcoin ETF market saw net inflows of more than $818 million after considering the withdrawals of GBTC, even if the overall Bitcoin market saw losses during that same time frame.

More $376 million BTC left the Grayscale Bitcoin Trust at 7:17 p.m. UTC on January 16, according to Arkham data. 9 p.m. UTC is when the U.S. stock market ends.

A few traders hold the increased GBTC costs responsible for the withdrawals. Reviewers claim that GBTC’s 1.5% management fee is greater than that of most of its rivals.

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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