BTC price is recovering very well and has retested $52K this week. BTC Spot ETF is considered the main driving force for this strong price increase of BTC, when selling pressure from GrayScale decreased to below $100M per day while buying force from the remaining ETFs providers continued to be maintained
[1]. However, we just received news that may not be good for BTC's price increase:
A court ruling has allowed Genesis to liquidate $1.3 billion worth of Grayscale Bitcoin Trust (GBTC) shares. The court decision is part of an effort to reimburse investors after Genesis filed for bankruptcy. The company held roughly $1.3 billion worth of shares in GBTC before the filing. Grayscale objected to the sale of the assets, but the judge ruled in favor of Genesis.
"A bankruptcy judge will allow Genesis Global Holdco to liquidate roughly $1.3 billion worth of Grayscale Bitcoin Trust (GBTC) shares as part of efforts to reimburse investors[2]."If Genesis decides to quickly liquidate all $1.3B worth of BTC, I think BTC's price momentum will be negatively affected, even though Genesis may only sell BTC via the OTC market.
1 month ago, after the BTC Spot ETF was approved on January 11, 2024, FTX liquidated about $1B worth of GBTC (it can be considered that FTX converted GBTC for BTC and then sold BTC on OTC), and we have seen BTC price drop 20% from $49K to $39K
[3]. Fortunately, at that time, the excitement of traditional investors helped the remaining ETFs providers absorb all the BTC sold by FTX.
I expect that ETFs providers will continue to have large and continuously increasing net inflows like the past 4 days, averaging $450M per day
[4]. This will be a necessary condition for all of Genesis's BTC to be absorbed and not have a negative impact on BTC price.
Personally, I'm worried that this selling pressure from Genesis could push BTC into the 0.6178 ~ $39K Fibo zone again before BTC recovers and breaks through $69K.
Are you bothered by the fact that Genesis will sell $1.3B worth of BTC? Do you think this event will have a negative impact on BTC's price increase? Have you updated your BTC investment strategy because of this event?
[1]
Grayscale GBTC Outflow Slows as Premium Enters Positive Range[2]
Court clears Genesis to liquidate $1.3B worth of Grayscale GBTC shares[3]
FTX Sold About $1B of Grayscale's Bitcoin ETF, Explaining Much of Outflow: Sources[4]
Bitcoin ETFs inflows snowball: Last 4 days bigger than first 4 weeks