Bitcoin ETFs Experience Shifts: GBTC Sells While Others Buy Amid Price Drops
Summary:
In January, the Grayscale Bitcoin Trust (GBTC) sold a significant amount of Bitcoin (BTC), but this was offset by purchases from other exchange-traded funds. GBTC's holdings reduced by 21%, while non-GBTC ETFs increased their holdings by 674%. Collectively, ten spot Bitcoin ETFs held 647,709 BTC by the end of January, showing a slight 1.6% increase from the initial total holdings. Despite this, Bitcoin's price experienced a considerable drop over the past month. The launch of spot Bitcoin ETFs in America sparked a "sell the news" effect, with predictions of further pressure from the futures market.
In January, the Grayscale Bitcoin Trust (GBTC), an exchange-traded fund, made notable Bitcoin (BTC) divestments, yet other funds bought substantially higher BTC volumes. As Cointelegraph's analysis of public holdings data shows, GBTC offloaded close to 132,195 BTC last month, causing a 21% drop in its Bitcoin holdings from 619,220 BTC (on Jan. 11) to 487,025 BTC (on Jan. 31). Meanwhile, nine other funds bought up an additional 142,294 Bitcoin from the opening trading day. These other non-GBTC ETFs swelled their holdings by a stunning 674%, moving from just 18,390 BTC at the beginning of trading to 160,684 BTC by January's end.
As of the conclusion of January, the ten spot Bitcoin ETFs held collectively 647,709 BTC, a marginal 1.6% increase from their initial total holdings of 637,610 BTC, which currently values at about $27 billion, based on CoinGecko's data. This information is sourced from publicly released BTC ETF data by issuers, except for BlackRock’s iShares Bitcoin Trust (IBIT) who didn't share daily holdings at the time of reporting. The Arkham Intelligence blockchain platform allows a tracking of IBIT’s holdings, and on Jan. 23, they recognized the on-chain addresses of six spot Bitcoin ETFs, including IBIT.
According to Arkham’s data, BlackRock’s iShares Bitcoin ETF possesses 57,488 BTC currently, signaling that IBIT divested 6,000 BTC on January's final day. By selling off 6,000 BTC, BlackRock’s iShares ETF relinquished its position as the second-largest spot Bitcoin fund by holdings to Fidelity' Wise Origin Bitcoin Fund (FBTC), which held 58,400 BTC at the conclusion of January.
Despite all ten spot Bitcoin ETFs' total holdings growing 1.6% in January, Bitcoin's price has experienced a marked decrease in the past month. Starting the year around $45,000, it hit rocky waters and sank to below $39,000 on Jan. 23, according to CoinGecko's data. Presently Bitcoin's trading value is around $42,215, which represents an estimated 8% decrease over the prior month.
Speculations abounded that the introduction of spot Bitcoin ETFs in the U.S. would result in a “sell the news” effect, with industry analysts suggesting greater pressure might be exerted from the futures market. Cathie Wood, CEO of ARK Invest, forecasted in late 2023 that some investors would likely "sell on the news" following the spot Bitcoin ETF approval, albeit in the short term. However, she believes the long-term outlook remains optimistic.
Published At
2/1/2024 2:14:00 PM
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