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Bitcoin

Can Grayscale Actually Sell Bitcoin (BTC) After Unlock of GBTC Shares?

by Miki 07/15/2021
by Miki 07/15/2021 0 comment

The current Bitcoin price volatility and sideways movement are being attributed to the ongoing unlock of Grayscale’s flagship Bitcoin trust $GBTC.  Many believe the unlock of shares after 6-month put pressure on the spot market in the short term. However, it is important to note that Grayscale doesn’t sell its BTC on the expiry of shares.

Investors buy Bitcoin to deposit it in the GBTC fund and get shares against their BTC deposit, In a way, the Bitcoin kept in GBTC never moves, and apart from the 2% management fees charged by the Grayscale.

The unlock of these shares are still bearish in the short term since the premium on GBTC tends to go negative around the selling period, thus investors have more incentive in buying GBTC shares than Bitcoin at its spot price.

Source: Ycharts

The GBTC premium is currently at -11.25% which means after selling their shares on the spot market the traders can again buy these shares at an 11% discount than BTC at spot price.

GBTC premium plays a key role in the 6-month long holding period, the institutional buyers hope to sell it at a high premium than the price bought it at. GBTC has traded a majority of the first quarter in a positive premium price range but turned negative post-April. In absence of a regulated Bitcoin Exchange Traded fund, Grayscale’s crypto products have become a go-to choice for investors. The world’s leading asset manager is also planning to convert its GBTC into a Bitcoin ETF by next year.

Bitcoin Price Lose Key On-Chain Support

The top cryptocurrency has lost more than 50% of its valuation since its ATH near $65,000 in April. BTC has failed to break past $35K key resistance on several occasions and currently struggling to hold $31.5K support.

The top cryptocurrency’s struggle to break out of its current price range has driven out retail players leading to a low liquidity market. The bearish phase may continue further if Bitcoin fails to hold onto the $30K support.

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The New Jersey Crypto News
  • Home
  • News
    • Bitcoin
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    • All Alt Coin
  • Learn
    • Learn

      How to Trade Futures Contracts on Changelly PRO

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      11/12/2021

      Learn

      How to Trade Bitcoin Futures

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      How to Start Trading Cryptocurrency

      10/21/2021

      Learn

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  • Analysis
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      Bitcoin is Struggling, But It’s Too Early to Say Bulls Have Given Up

      12/29/2021

      Analysis

      Sushi Up 17% Amid DeFi 2.0 Rescue Rumors

      12/29/2021

      Analysis

      Ethereum Recovery Could Soon Fade If ETH Fails To Surpass $4k

      12/28/2021

      Analysis

      Charles Hoskinson Shares Cardano Plans for 2022

      12/28/2021

      Analysis

      Bitcoin Prints Bullish Pattern, Why BTC Could Surge To $50K

      12/27/2021

  • Blockchain
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      Iran Bans Crypto Mining to Avert Major Blackouts in Winter Season

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      Blockchain

      Italian Sports Car Maker Ferrari Inks Multi-Year Deal With Blockchain Firm Velas Network AG…

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