FTX Estate and Alameda Research Sell Majority GBTC Shares, Alameda Drops Lawsuit Against Grayscale
Summary:
The bankruptcy estate of FTX, the defunct crypto exchange, and hedge fund Alameda Research, sold over two-thirds of their Grayscale Bitcoin Trust shares, allegedly raising $600 million for the FTX Estate. This follows after the Trust was converted into an exchange-traded fund on January 11. Alameda Research had filed a lawsuit against Grayscale over excessive fees, a complaint dropped on January 22. Since the Trust's conversion, over $700 million worth of Bitcoin has been sold, prompting speculation of investors abandoning the fund due to the perceived high fees.
The bankruptcy estate of the defunct cryptocurrency trading platform FTX and hedge fund Alameda Research have reportedly offloaded over two-thirds of their stock in the Grayscale Bitcoin Trust (GBTC), as detailed by Bloomberg in a late January report. This information was supplied by two sources with knowledge on the matter. The sale supposedly fetched an estimated sum of $600 million for the FTX Estate.
A social media post indicates shocking headlines of a billion-dollar sell-off of Grayscale ETF by FTX, alongside Alameda filing a controversial lawsuit against Grayscale. Interestingly, FTX's estate reveal an approximate $1 billion worth of Grayscale's Bitcoin ETF sale, offering insights into the recent GBTC sell-offs.
The article indicates that FTX Estate once held 22.28 million shares in Grayscale Bitcoin Trust, valued at $902 million, ahead of a transformation of the Trust into a spot exchange-traded fund (ETF) on January 11. During the subsequent three trading days, FTX reportedly sold off most of its stake, reducing its holding to less than 8 million shares, now valued at roughly $281 million.
In March, Alameda Research lobbed a lawsuit at Grayscale over what it considered to be excessive fee charges. As part of the lawsuit, Alameda accused Grayscale of implementing a "self-imposed redemption ban", obstructing shareholders from accessing Bitcoin held by its Trust. For the most part, investors lacked mechanisms to claim their shares for the Trust's inherent Bitcoin value before January 11, at which point the Trust's share price sat 44% below that of its represented Bitcoin.
After January 11, when the U.S Securities and Exchange Commission approved Grayscale Trust to convert into an ETF, redemptions became available for authorized participants. As the approval date neared, GBTC shares' discount versus net asset value shrunk to 1.55%, creating alignment between the price of these shares and the value of the represented Bitcoin.
The Grayscale Bitcoin Trust has sold over $700 million worth of Bitcoin since January 11. Some market commentators posit that investors are ditching the fund due to perceived high fees. In an unexpected move on January 22, Alameda withdrew its lawsuit against Grayscale.
Published At
1/22/2024 11:39:31 PM
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