Grayscale's Conversion to ETF and FTX Sell-Off Impact Bitcoin's Value: Bitfinex Alpha Analyzes
Summary:
Bitfinex Alpha's report indicates that Grayscale Bitcoin Trust ETF's large-scale sell-off, partially initiated by bankrupt exchange FTX, contributed considerably to Bitcoin's value dip in January 2024. Grayscale's transition from a trust to an ETF led to $4.3 billion of outflows, although BlackRock's iShares Bitcoin Trust saw an inflow of $1.82 billion. The analysis notes that FTX sold all of its 22 million GBTC shares and highlights Grayscale's higher fee structure (1.5%) compared to its competitors (0.2 to 0.9%), potentially driving investors to other ETFs. The report concludes with observable shifts in the capital within the Bitcoin ETF arena as investors seek more affordable Bitcoin accessibility. This appears to be stabilizing towards the end of January 2024.
A latest analysis from Bitfinex illustrates how the substantial disposal of shares from Grayscale Bitcoin Trust ETF, aided in part by the bankrupt FTX exchange, had a considerable bearing on Bitcoin's slump in January 2024. According to Bitfinex Alpha's latest insights, the realization of gains following Grayscale's successful transition from its GBTC trust to a full-blown exchange-traded fund (ETF) played a significant role in the overarching market correction that saw BTC dip from $48,700 to $38,600 within several days.
Any fluctuations in Grayscale (GBTC) and IBIT (Ishares, Blackrock) spot ETF flows represented the broadest positive and negative shifts for spot Bitcoin ETFs, shown on etf.com/Bitfinex Alpha.
Upon GBTC’s conversion to a spot Bitcoin ETF on January 16, the report indicates $4.3 billion worth of outflows. Conversely, in terms of individual spot Bitcoin ETFs, BlackRock's iShares Bitcoin Trust was in charge when it came to net inflows, amassing $1.82 billion.
Furthermore, Bitfinex's analysis draws a focus to how spot Bitcoin ETF movements have ripple effects on the BTC price, evidenced by the lack of capital movement into any spot Bitcoin ETF on Saturday, January 20.
Despite a dip from $28.6 billion to $24 billion in overall assets under management, Grayscale’s GBTC holds on to its place as the top Bitcoin ETF.
The analysis from Bitfinex also points out that Grayscale's transformation from trust to spot Bitcoin ETF enabled FTX, a bankrupt crypto exchange, to dispose of its substantial shareholdings. FTX jettisoned 22 million GBTC shares worth almost a billion, thereby liquidating their entire holdings.
Bitfinex Alpha analysts also observe the potential sway of varying ETF fees as a driving force behind the sales of GBTC shares. Grayscale’s competitors are charging fees from 0.2 to 0.9 percent, as opposed to GBTC’s 1.5 percent. This major discrepancy in fee structure could be instigating a shift of investors from GBTC to other ETFs, especially to mainstream financial powerhouses that boast considerable experience with managing ETFs.
Analysts suggest that attempts to gain access to Bitcoin at lower costs are driving the capital reallocation within the still-developing Bitcoin ETF arena. As January wraps up, ETF trends suggest that the interchange of capital amongst diverse ETF funds is starting to stabilize.
Published At
1/30/2024 2:54:44 PM
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