The Grayscale Bitcoin Trust (GBTC), once the undisputed king of Bitcoin exposure, is experiencing a dramatic exodus. Since its conversion to a spot Bitcoin ETF in mid-January, the fund has bled over 95,600 BTC, representing a staggering 15% plunge in its Bitcoin holdings within just a week.
On-chain analytics paint a clear picture of the mass exits. Lookonchain reveals substantial outflows peaking on January 16, 18, 22, 23, and 24, with daily sell-offs exceeding 13,000 BTC. This contrasts with a measly 2,083 BTC outflow on the launch day, highlighting a rapidly accelerating trend.
While GBTC sheds Bitcoin like a bad habit, its newer ETF rivals are feasting. Other spot Bitcoin ETFs have collectively accumulated over 110,000 BTC since their debut, with Fidelity’s FBTC leading the charge with a 4,023 BTC gain on January 25th alone.
The question on everyone’s lips is: how far will this exodus go? Ki Young Ju, founder of CryptoQuant, expresses fear that the trend could continue until mid-March, potentially draining GBTC of its entire Bitcoin stash. “What’s their plan?” Ju asks, echoing the anxiety within the community.
Will The Sell-off Affect BTC
This massive sell-off poses a significant threat to Bitcoin’s price. Analysts predict BTC will remain stagnant or even fall further until the roughly $21 billion worth of remaining GBTC shares are liquidated. The pressure from this ongoing sell-off is already being felt, with BTC plummeting below $40,000 and shedding 20% since the ETF’s launch.
However, amidst the gloomy forecasts, Galaxy Digital founder Mike Novogratz offers a glimmer of hope. He believes that investors will eventually gravitate towards the newer, cheaper ETFs, ultimately leading to a Bitcoin price rally.
Only time will tell whether Novogratz’s optimism or the analysts’ pessimism will prevail. One thing is certain: the GBTC saga is far from over, and its impact on the Bitcoin market will be closely watched in the coming weeks and months.