Grayscale Bitcoin Trust's BTC Transfers Stir Speculations Amid Price Drop
Summary:
The Grayscale Bitcoin Trust (GBTC) transferred 894 Bitcoin to Coinbase Prime's wallet and another $119 million to anonymous wallets on Jan. 12, a day after enabling authorized Bitcoin redemptions. This event corresponded with a decline in Bitcoin's price, leading social media theorists to speculate Grayscale Trust redemptions were the cause. However, compared to Grayscale's assets, the withdrawals were small. Despite this, if GBTC redemptions continue, CNBC Crypto Trader host Ran Neuner suggests Bitcoin may face extended selling pressure.
On January 12, the Grayscale Bitcoin Trust (GBTC) relocated 894 Bitcoin (valued at $41 million during the transfer) to Coinbase Prime's deposit wallet, as indicated by data from Arkham Intelligence, a blockchain analytics agency. This transaction occurred a day after the trust allowed authorized participants to redeem Bitcoin. Some theorists on social media platform X, formerly known as Twitter, speculated Grayscale Trust's redemptions triggered Bitcoin's price drop. However, compared to Grayscale's total assets, these withdrawals have been fairly small. Alongside the $41 million transferred to Coinbase, another $119 million was sent to previously unknown wallets. The Grayscale Bitcoin Trust is reputed to be one of the largest singular Bitcoin holders globally. Arkham data now places the trust's holdings at $27 billion which can be attributed to the rise of Bitcoin's price in recent months. GBTC shares have been tradable since 2013, but Bitcoin redemption only became a possibility on Jan. 11. Consequently, these shares have often traded at a significant discount to their net asset value (NAV).
Data from Arkham Intelligence showed that the trust dispatched 894 BTC to Coinbase and 2,607 BTC to other wallets in four different transactions on Jan. 12. This day also marked the launch of several Bitcoin ETFs. The Coinbase transaction is representative of $41 million, or around 0.15% of Grayscale Trust's total holdings, and the remaining transactions equate to an additional $119 million or 0.44%.
Simultaneously, Bitcoin's price experienced an unexpected drop, reducing from about $46,000 to just over $43,000 by 6:47 pm UTC, indicating the break of a prevalent support line at $44,740. Despite the small outflow ratios highlighted by Arkham, some X platform users suggested that Grayscale Trust share redemptions were responsible for the decline. X user, Fomocap, posted an image of the falling Bitcoin price and remarked: “People are selling $25b worth of GBTC, welcome to ETF.” Another user, Napatradamus, echoed a like-minded view, flagging that less than $1b of the total $28b had been transferred. CNBC’s Crypto Trader host, Ran Neuner, chimed in, tweeting that “Bitcoin Price is dumping as people are dumping their GBTC shares.”
Neuner advised of a potential extended selling pressure on Bitcoin, stating that “$25bn is a serious number and even if just 20% are redeemed, that's $5bn in sales on the market.” While Grayscale has not publicly disclosed its wallet addresses, there could be inaccuracies about the trust's actual wallet size if the data from Arkham is incorrect.
Published At
1/12/2024 11:11:07 PM
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