CDS Crypto News FTX Behind GBTC Outflows Approaching 1 Billion Dollars
Crypto News

FTX Behind GBTC Outflows Approaching 1 Billion Dollars

FTX has been selling off GBTC in recent weeks as its discount to BTC returned to parity.

346
Ftx Behind Gbtc Outflows Approaching 1 Billion Dollars

The now-defunct FTX crypto exchange is reportedly responsible for a substantial outflow, approaching $1 billion, from the Grayscale Bitcoin Trust (GBTC) this month.

FTX Behind GBTC Outflows Approaching 1 Billion Dollars

This series of outflows, linked to FTX’s bankruptcy, is believed to have contributed significantly to the recent downturn in the price of Bitcoin (BTC). According to a recent report from CoinDesk, FTX’s bankruptcy proceedings involved the sale of nearly $1 billion worth of GBTC after the fund underwent a transition into a Bitcoin spot ETF and received approval from federal regulators.

FTX’s Impact on Bitcoin: A Suppression?

According to CoinDesk, citing privately reviewed data and insights from two individuals familiar with the situation, the estate linked to FTX has reportedly offloaded 22 million GBTC shares. A filing from early November indicated that FTX held 22.3 million GBTC shares valued at $597 million as of October 25. Presently, at the current market price, these shares would be valued at $798 million.

The increase in share value is attributed to two key factors. Firstly, the surge in Bitcoin’s price, rising from around $34,500 on October 25 to the current level of $40,000, including a peak of $49,000 earlier this month. Secondly, the approval and subsequent conversion of GBTC into a Bitcoin spot ETF has eliminated a long-standing discount between the value of GBTC shares and the fund’s underlying Bitcoin holdings. In early 2023, GBTC was discounted by over 40% against the price of BTC.

With the discount now eliminated, major GBTC holders, including FTX, are motivated to capitalize on profits. On the first day of GBTC trading as a spot ETF, the value of FTX’s share ownership surged to $900 million.

However, it’s essential to note that the reported $900 million value doesn’t necessarily reflect the entire proceeds from FTX’s stake sale. According to Bloomberg ETF analyst James Seyffart, FTX’s selloff was less than $1 billion.

Ftx Behind Gbtc Outflows Approaching 1 Billion Dollars
Written by
sevval

Şevval has been actively writing since 2022 and is a third-year mathematics student at Ankara University. Her interest in writing is shaped particularly around innovative technologies such as Web3, artificial intelligence, and blockchain. She closely follows developments in these fields and aims to convey complex topics to readers in a clear and engaging manner. She enjoys combining her mathematical knowledge with technology to create content and strives to raise awareness about the digital world of the future.

Leave a comment

Leave a Reply

Related Articles

Ripple News – Ripple’s Bold Move in Japan: A Stablecoin Revolution Coming Soon?

Ripple's expansion in Japan, including its stablecoin ambitions backed by the yen,...

Top 5 Altcoins to Watch Before U.S. Data Release – February 6, 2025

The top five altcoins are experiencing significant growth ahead of the U.S....

Bittensor Price Surge: Is a Bullish Trend on the Horizon?

Bittensor (TAO) price surges 10.56%, breaking key resistance levels with strong market...

Dogecoin Price Analysis: Why Now Might Be the Perfect Time to Buy

Dogecoin (DOGE) shows bullish signs, with analysts predicting potential gains. Can it...