Cryptocurrency

How Will Bitcoin (BTC) Be Affected by Grayscale’s Large Expiry? 4 Experts Comment

A major Grayscale Trust expiration could hit the markets in July as the six-month share lockdowns end. JPMorgan claims that lockdown periods will cause downward pressure on the Bitcoin price. However, other cryptocurrency experts say that the highly anticipated lockdown deadline may not create as much volatility as expected.

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A portion of the nearly 40,000 Bitcoin stake in the Grayscale Bitcoin Trust will open in July as the carefully watched lockdown deadline for the world’s largest Bitcoin fund expires.

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Due to the nature of the Grayscale Bitcoin Trust, institutional investors who buy the fund directly must hold the shares for six months before selling.

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Many lockdown periods end in July, and with 650,000 Bitcoins in the fund, about 5% of the fund can be sold within a few weeks. Since Grayscale is the largest Bitcoin fund, some investors are worried about the sale of GBTC and think that it will exert downward pressure on GBTC and Bitcoin prices.

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Bybt. According to com, July 18, 16. One of the biggest days of the unlock era as GBTC became available for trading at the cost of 240 bitcoins. 4 crypto experts voiced their opinions on how unlocking will affect the Bitcoin market.

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Kraken Intelligence Researchers

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Kraken Intelligence researchers noted that the end of the lockdown period could potentially put upward pressure on GBTC prices and Bitcoin:

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“The vast majority of GBTC holders whose shares will be unlocked this month are large institutions. Also, they probably shorted Bitcoin in the spot and futures market to avoid being unintentionally affected by price volatility. ”

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Kraken said that if institutions decide to loosen their positions, they will have to buy Bitcoin on the spot market to meet GBTC, which could potentially benefit Bitcoin being unlocked.

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JP Morgan

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In June, JPMorgan stated that the GBTC share sale could create a storm for Bitcoin:

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“As a reminder to our readers, last December and last January, GBTC saw the highest monthly inflows of $2 billion and $1.7 billion, respectively, and this reflects valuable GBTC premium monetization processes by hedge funds and other investors. With the six-month lock-in period ending in June and July, it is possible for these investors to sell at least some of their GBTC shares, putting downward pressure on GBTC prices and Bitcoin markets more generally. ”

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William Quigley, Co-Founder of Tether

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The co-founder of one of the world’s largest stablecoins said that some institutions that bought GBTC six months ago may not sell quickly at maturity because it is now in waste.

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“Some will put off the sale quickly so they don’t necessarily see any damage. ”

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Quigley also noted that the decline in Grayscale’s net asset value (NAV) could indicate less institutional demand for the once sought-after work. He said this is not an indication that institutional interest in Bitcoin has waned, but rather a sign that institutions are acquiring Bitcoin in other ways (for example, Canada’s Bitcoin ETF).

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Ryan Todd, The Block News Agency

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Ryan Todd, a research analyst at The Block Crypto, said the market could be in a state of great alarm for negative catalysts in the cryptocurrency market. He added that with the decline in NAV, many investors may not be able to sell their GTBC shares once the lockdown period has passed:

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“There is even an argument that some investors who were aiming for market-independent trading strategies to collect the GBTC premium by borrowing Bitcoin 6 months ago and sending it to the fund will now have to physically buy Bitcoin to pay back the borrowed money. ”

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