GBTC Bleeding Fuels Bitcoin’s Drop Below $39K

Bitcoin’s price has dropped below $39,000 for the first time in two months as investors leave Grayscale’s Bitcoin Trust (GBTC). Since becoming a spot Bitcoin exchange-traded fund (ETF) in January, GBTC has experienced over $3.4 billion in outflows, prompting Grayscale to deposit billions of dollars’ worth of Bitcoin to Coinbase Prime for potential sale. Though there are concerns that the GBTC exodus will continue, Bloomberg ETF analyst Eric Balchunas suggests that recent data shows the outflow may be slowing. A poll conducted by Balchunas indicates that respondents believe the mass exodus will end at around a 35-50% reduction in shares, while Balchunas and fellow Bloomberg ETF analyst James Seyffart estimate it will happen at around 25%. Currently, there are 600.5 million GBTC shares outstanding, with 536,694.9 Bitcoin held in trust. Since January 10, over 82,525 Bitcoin has left GBTC, with FTX exchange reportedly selling two-thirds of its 22.3 million shares in the trust. FTX still has around 8 million shares left to sell. Concerns have also arisen around the potential movement of Bitcoin from Mt. Gox, as the trustee of the defunct exchange has reportedly contacted creditors for identity verification to use their crypto exchange accounts to repay Bitcoin and Bitcoin Cash. These factors, along with a Crypto Fear & Greed Index hitting a 100-day low, contribute to the current state of the market. Bitcoin is currently trading at $39,949, up 0.60% on the day.