Grayscale Fund Redemptions
Traders said that while spot Bitcoin ETFs have attracted billions of dollars, a large proportion of inflows likely came from redemptions moving from the Grayscale Bitcoin Trust to lower-cost competitors.
About $7 billion in investments have exited the $24 billion investment fund since it was transferred from a trust. Bankrupt cryptocurrency companies FTX and Genesis were among the largest holders of Grayscale Bitcoin Trust assets.
“One of the news that is also being watched is the recent court decision to allow Genesis to sell its holdings in the Grayscale Bitcoin Trust,” said Ryan Kim, head of derivatives at major digital asset broker FalconX.
Further selling pressure could occur as these companies redeem units and pay off creditors, while selling from miners is on the rise in part due to an upcoming update to the Bitcoin trading code in the so-called “halving”, which is set to significantly reduce cryptocurrency mining revenues. big.
Market participants said another reason for the recent rally could be optimism among traders betting on momentum; They anticipate a short-term peak before positive macroeconomic developments, such as interest rate cuts.
For his part, Kim said: “We haven’t seen a lot of the classic signs of a physical shortage of Bitcoin yet in the OTC spot market. This is mostly because a lot of ETF market makers don’t deal with the spot market directly at all.” Rather, what we have seen is that market makers are hedging price risks throughout the day using derivatives in authorized entities in the United States.”
2024-02-17 14:21:38
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