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FTX Offloads $908 Million in GBTC Shares Amid Bankruptcy Proceedings

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FTX Offloads $908 Million in GBTC Shares Amid Bankruptcy Proceedings
  • FTX sold $908 million worth of GBTC shares.
  • Outflows from GBTC have surged to $3.45 billion.
  • Panic selling has emerged, yet the market remains relatively balanced.

Amid bankruptcy proceedings, FTX has offloaded 22.3 million shares of GBTC valued at approximately $908 million as of January 11. This was reported by CoinDesk, citing informed sources.

FTX’s position in GBTC was valued at $597 million as of October 25, 2023. Like other asset holders, the current management of the platform benefited from neutralizing the discount to NAV.

According to CoinDesk, following the positive decision by the SEC on ETFs, investors divested from Grayscale’s digital gold-based exchange-traded fund to the tune of over $2 billion.

The publication suggested that once the liquidation process concludes, selling pressure on Bitcoin should ease.

“Fierce Game”

On the evening of January 18, the price of the leading cryptocurrency fell below $42,000. Experts interviewed cited profit-taking on GBTC from Grayscale as one of the reasons for the negative trend. 

On January 22, the digital gold prices continued to correct, reaching early December levels—below $40,000.

Since the approval of 11 spot Bitcoin ETF applications in the U.S., including the conversion of the GBTC trust, the price of the leading cryptocurrency has dropped by approximately 13%—from around $46,000 to current levels. 

According to Greeks.live, options data reflects the presence of a certain number of short-term panic orders in the market. Experts noted the balance of long and short positions, describing the situation as a “fierce game.”

Analyst ali_charts urged a measured approach to current events, hinting at the medium-term positive impact of the Bitcoin ETF launch.

“Excluding Grayscale, all ETF issuers collectively acquired over 86,320 BTC at an average price of $42,000, totaling $3.63 billion. Do you think institutions really bought at the top? This level of institutional investment suggests a strategic, long-term perspective, not peak buying,” he explained.

According to the specialist’s calculations, Bitcoin whales have sold 70,000 BTC (~$3 billion) over the past two weeks.

According to Lookonchain, some of the funds from GBTC sales are being redirected to competing ETFs with lower fees. For instance, BlackRock’s product, iShares Bitcoin Trust, received 4,808 BTC (~$194.4 million) from Coinbase Prime and currently holds 33,431 BTC (~$1.33 billion).

Pressure on GBTC remains. Bloomberg analyst James Seyffart lamented that outflows from the instrument have accelerated.

“Bad day. Over $640 million was withdrawn today. Outflows aren’t slowing, they’re increasing. This is the largest for GBTC [since ETF approval]. The total amount so far is $3.45 billion,” he calculated.

Galaxy Digital CEO Mike Novogratz stated that most investors liquidating positions in GBTC will redirect funds to similar instruments, neutralizing the current weakness of the leading cryptocurrency.

Earlier, Grayscale CEO Michael Sonnenshein predicted the collapse of most products. In his view, only “two or three exchange-traded funds might achieve some critical mass.” 

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