On January 16, the Grayscale Bitcoin Trust (GBTC), a significant holder of Bitcoin, transferred 8,730 BTC, equivalent to over $376 million, to Coinbase Prime deposit addresses. This activity, reported by blockchain analytics platform Arkham Intelligence, suggests that the fund might be preparing to sell some of its Bitcoin holdings due to declining stock prices. Analysts have noted that recent outflows from the trust might be contributing to the downward pressure on Bitcoin prices. However, Bitcoin's price seemed to stabilize during the midday trading hours in the U.S. on the same day.
Before January 11, GBTC investors were restricted from redeeming their shares for Bitcoin or cash. This changed when the trust transitioned into an exchange-traded fund (ETF) on January 11, allowing authorized participants to buy shares from investors and redeem them for the Bitcoin or cash value they represent. This process necessitates selling Bitcoin to fulfill these redemptions, typically happening when GBTC's share price falls below the underlying Bitcoin value.
Arkham Intelligence data indicates that GBTC moved $41 million to a Coinbase Prime wallet on January 12, possibly signaling a Bitcoin sale. This outflow coincided with a significant decline in Bitcoin's price on the same day.
Bloomberg analyst Eric Balchunas, posting on X (formerly Twitter), noted that GBTC experienced significant outflows of $95.1 million and $484.1 million by the end of trading on January 12. He cited Bloomberg Terminal as his source. Balchunas also observed that other Bitcoin ETFs like the iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund saw nearly $1.4 billion in inflows over two days. Considering the GBTC outflows, the U.S. spot Bitcoin ETF market saw net inflows exceeding $818 million during this period, despite the broader Bitcoin market's losses.
Further data from Arkham on January 16 revealed an additional $376 million in BTC outflows from GBTC by 7:17 pm UTC, ahead of the U.S. stock market's closing at 9:00 PM UTC.
Some traders attribute these outflows to the higher fees charged by GBTC, which stands at 1.5% for management. This fee is criticized for being higher than most of its competitors.
