Grayscale transfers 9K Bitcoin in anticipation of a possible sale: the consequences on the crypto market

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Grayscale has recently transferred 9,000 Bitcoin in preparation for an upcoming sale. This news caused a drop in the value of Bitcoin at the beginning of the day, but the cryptocurrency quickly showed a fast recovery. Let’s see all the details below. 

Grayscale shakes up the market with the massive sale of Bitcoin 

As anticipated, Grayscale, the manager of the Grayscale Bitcoin Trust (GBTC), transferred another 9,000 bitcoin units to an exchange at the beginning of the day. 

This coincides with the continued net sales of the product after its transformation into an exchange-traded fund (ETF) spot.

According to the data from Arkham Intelligence, coin transactions occurred in blocks of 1,000 shortly after 14:30 UTC, coinciding with the opening of the US stock markets after the long weekend.

After regulatory approval in the United States for a spot ETF last week, Grayscale’s GBTC recorded net outflows. 

This is because investors have sold for various reasons, including the elimination of the discount on net asset value and lower fees compared to competing ETFs.

This fund outflow has led Grayscale to sell 2,000 bitcoins the previous week, a number that has risen to 11,000 up to this point, reducing GBTC’s holdings to less than 610,000 BTC.

Upon hearing the news of Grayscale’s actions, the price of Bitcoin (BTC) experienced a sudden drop of almost 2%, falling below $42,100. However, at the moment, the cryptocurrency has quickly recovered, reaching $43,100. 

Some speculations behind Grayscale’s recent actions 

Grayscale Investments has sparked interest in the crypto community after moving thousands of Bitcoin (BTC) to various addresses over a thirty-day period. 

According to the data provided by Ki Young Ju, CEO of CryptoQuant, Grayscale has made total transfers of 21,400 BTC from its wallets, including the Coinbase exchange as one of the recipients.

Despite Grayscale’s commitment to launching ETFs, its on-chain Bitcoin activity has not slowed down. Ki Young Ju’s data indicates a consistent decline in the company’s Bitcoin balance since at least January 2021. 

Although December 2023 recorded the largest monthly outflow from the Grayscale Bitcoin Trust since August 2019, the outflows this week rank as the second most significant, with about two weeks remaining.

One possible explanation for these withdrawals could be related to liquidation or custody reasons. Coinbase, mentioned as a custodian in Grayscale Bitcoin ETF products, may have received the Bitcoins for security reasons.

According to Ki Young Ju, the sector has seen outflows of over 579 million dollars from GBTC in two days, with the prospect of a possible transfer of an additional 8,000 BTC in the near future.

While the transfer of Bitcoin by Grayscale Investments is significant, it is not the only contributing factor to the current bearish market outlook. 

Market experts still maintain a general optimism for an imminent mega rally of Bitcoin, especially with the acquisition of a suitable price for the spot ETF product.

Benjamin Cowen’s perspectives on Bitcoin 

The cryptographic analyst Benjamin Cowen is revisiting his predictions for Bitcoin (BTC) in light of the possibility that the Federal Reserve may change its restrictive monetary policies in the coming months.

According to Cowen, when the Fed starts cutting rates, probably in March according to the CME’s FedWatch Tool, risky assets like Bitcoin could experience a loss of value.

Cowen emphasizes that cutting interest rates is not always positive for risky assets, as the reason behind such a decision can influence the market. 

He also warns that Bitcoin could fall, testing the levels within the support range of the bullish market, formed by the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).

The analyst advises to pay attention to the eight-week moving average, currently around $42,300. 

In particular, stating that a downward breakthrough could bring the price of Bitcoin to test the support range of the bullish market, between $35,000 and $37,000. 

Cowen finally highlights a pattern previously observed in similar situations.