2024-01-22 04:02:07
Since the Bitcoin spot ETF was approved for listing, Bitcoin’s performance has been sluggish, and the grayscale GBTC, which has transformed into a Bitcoin spot ETF, has continued to outflow in large amounts, which is considered to be the main reason for the decline in currency prices. Some analysts believe that before the liquidation of GBTC is completed, , Bitcoin may continue to fall, but Galaxy Digital founder Mike Novogratz holds a different view.
(Previous summary: Currency Market Morning News) Bitcoin seesawed between long and short positions at US$41,500, while Ethereum struggled to reach 2,500 US dollars.)
(Background supplement: Is Bitcoin plummeting because of Grayscale GBTC’s crash?)
Since the U.S. Securities and Exchange Commission (SEC) approved the Bitcoin spot ETF, the price of Bitcoin has dropped significantly, from as high as $48,969 on the 11th to currently fluctuating around $41,500. The market believes that this is related to the transformation of Grayscale GBTC into Bitcoin. After the spot ETF, investors continued to sell large amounts to take profits as the negative premium approached zero.
According to BitMEX Research dataIt shows that following GBTC was transformed into a Bitcoin spot ETF, in the first six trading days as of last Friday, the total outflow of GBTC was as high as US$2.8 billion, with an outflow of US$95.1 million on the first day, an outflow of US$484.1 million on the second day, and an outflow of US$484.1 million on the third day. The outflow on the first day was US$594.4 million, the outflow on the fourth day was US$460.6 million, the outflow on the fifth day was US$582.3 million, and the outflow on the sixth day was US$590.4 million.
Daily changes in capital inflows and outflows of various Bitcoin spot ETFs. Source: BitMEX Research
Will Bitcoin continue to fall?
Although some people in the market believe that one of the reasons for the sell-off of GBTC may also be related to its high management fee of 1.5%. The funds selling GBTC are likely to flow into other ETFs with lower management fees, but Bloomberg analyst Eric Balchunas expresshe believes that only 10% of GBTC funds may flow out and eventually flow into other 9 ETFs, which is much less than people think.
Given that GBTC is currently the largest Bitcoin ETF in the world, holding more than $25 billion worth of Bitcoin, Ran Neuner, co-founder and CEO of Onchain Capital, previouslywarnBitcoin may face a period of selling pressure. US$25 billion is a considerable position. Even if only 20% is redeemed, it means that there will be US$5 billion of selling pressure on the market.
Therefore, Chris J Terry, chief architect of BTCdata, tweeted on the 21stthinkbefore the GBTC liquidation is completed, the price of Bitcoin will continue to be flat or fall, and there will be a sell-off of up to 25 billion US dollars in the next few weeks. Grayscale’s decision to keep the ETF management fee at 1.5% will become the largest in the history of cryptocurrency. Strategic mistake.
Mike Novogratz is bullish on Bitcoin going higher in 6 months
However, Galaxy Digital founder Mike Novogratz did not agree with Chris J Terry’s argument. He tweeted on the 21stexpressalthough people will sell GBTC, most people will turn to invest in other ETFs, and the own Invesco Galaxy Bitcoin ETF is his favorite:
Let’s not miss the forest because there are trees ahead. Now it’s easier for baby boomers to buy. You can get 4 to 5 times leverage through Bitcoin exposure. The indigestion will be over. Bitcoin will be in 6 higher within the month.
I disagree with this. While I think people will sell GBTC, I think most will switch into other ETFs – $BTCO being my favorite !!
Let’s not miss the forest through the trees. It’s now gonna be far easier for boomers to buy corn. And you can get 4×5 times leverage on this…
— Mike Novogratz (@novogratz) January 21, 2024
Mike Novogratz predicted in November last year that as the Bitcoin spot ETF was approved for listing, up to 10 billion new funds would flow into the Bitcoin ETF in the first year, and the price of Bitcoin this year would reach the all-time high of the 2021 bull market. Point $69,000.
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