What Bitcoin's Rise and Genesis' $1.6 Billion GBTC Sale Mean? 🤔💰
This week, Bitcoin's price has reached heights reminiscent of the 2021 bull run, but a shadow of uncertainty looms over the crypto market. Genesis, a subsidiary of Digital Currency Group, recently gained approval to sell $1.6 billion in Grayscale Bitcoin Trust (GBTC) shares to repay creditors. Let's break down the situation.
Genesis, tied to the collapse of Three Arrows Capital, filed for bankruptcy a year ago, freezing customer withdrawals post-FTX's demise in 2022.
A U.S. bankruptcy judge granted Genesis permission to sell $1.6 billion in GBTC shares. Bloomberg's James Seyffart estimates at least $1.4 billion worth of GBTC shares have been sold.
Experts, including Seyffart, believe Bitcoin's price may not suffer significantly due to Genesis' sell-off. Bloomberg's ETF expert, Eric Balchunas, notes the resilience of Bitcoin ETFs, minimizing the risk of a major sell-off.
In January, the SEC approved 10 spot Bitcoin ETFs after a decade of denials. These ETFs showcase high liquidity and resilience, according to Arkham Intelligence’s CEO, Miguel Morel.
Julio Moreno, head of research at CryptoQuant, suggests that increased Bitcoin demand from ETFs could offset selling pressure. CryptoQuant data indicates relatively low unrealized profits for short-term Bitcoin holders, implying low selling pressure.
Despite concerns about Genesis' GBTC sale, experts remain cautiously optimistic. The strength of Bitcoin ETFs and market resilience are seen as mitigating factors, with the overall sentiment suggesting the market may absorb the selling pressure without a significant downturn. Stay tuned as the crypto landscape continues to evolve.
