Investors have pulled out over $2 billion from the Grayscale Bitcoin Trust (GBTC) since its recent transformation into an exchange-traded fund (ETF).ț
This significant sell-off includes the FTX bankruptcy estate offloading 22 million shares, a move revealed through private data obtained by CoinDesk and confirmed by insiders.
The U.S. Securities and Exchange Commission (SEC) recently gave the green light to a range of spot Bitcoin ETFs, a long-awaited move that began to materialize on January 11.
This approval marked a shift for the decade-old GBTC, which transitioned from a less-desirable closed-end fund to an ETF. At the time of its conversion, GBTC held approximately $30 billion in assets.
However, since the arrival of new ETFs from prominent players like BlackRock and Fidelity, GBTC has witnessed significant outflows, with billions of dollars worth of bitcoin withdrawn.
The CoinDesk report highlights FTX’s substantial role in this trend, noting that its sale reduced its GBTC holdings to zero, equating to nearly $1 billion.
Following the ETF approvals, Bitcoin’s price has unexpectedly fallen, contradicting the high expectations set prior to the SEC’s decision. The recent completion of FTX’s sales may ease selling pressures, given the unique circumstances of a bankruptcy estate liquidating its holdings.
FTX’s strategy and current state
FTX, like many large crypto entities, exploited the price discrepancy between Grayscale trust shares and the underlying bitcoin’s net asset value. FTX’s GBTC holdings, once valued at $597 million, soared to around $900 million with the commencement of GBTC ETF trading.
Besides GBTC, FTX also invested in five other Grayscale trusts and held shares in a Bitwise-managed statutory trust. However, the involved parties, including Marex Capital Markets Inc. and Galaxy Digital, have refrained from commenting on the situation.
