The Grayscale Bitcoin Trust (GBTC) has reportedly moved 8,730 Bitcoins(over $376 million) to Coinbase Prime deposit addresses on January 16, as indicated by data from blockchain analytics platform Arkham Intelligence. This transfer suggests that the fund might have been compelled to sell some of its Bitcoin holdings due to a decline in its share price.
Several analysts contend that the outflows from the trust are impacting Bitcoin’s price, contributing to its recent decline. Despite these outflows, the price of Bitcoin seems to have stabilised during the mid-day trading hours in the United States on January 16.
The Grayscale Bitcoin Trust, one of the largest single holders of Bitcoin globally, recently underwent a transformation into an exchange-traded fund (ETF) on January 11. Prior to this conversion, investors were unable to redeem their shares for Bitcoin or its cash equivalent.
Since the conversion, authorised participants have been permitted to purchase shares from investors and redeem them for the cash equivalent of the represented Bitcoin. This redemption process leads to the trust selling Bitcoin to fulfil these transactions. Typically, this occurs when the GBTC price is lower than the value of the Bitcoin it holds.
On January 12, the trust transferred $41 million to a Coinbase Prime wallet, suggesting a potential sale of Bitcoin. Some traders speculated that this outflow might have contributed to the sharp decline in Bitcoin’s price on that day.
Bloomberg analyst Eric Balchunas reported on January 12 that the Grayscale Bitcoin Trust experienced outflows of $95.1 million on January 11 and $484.1 million on January 12, citing Bloomberg Terminal as the source. He also noted that other Bitcoin ETFs, like iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund, received inflows totaling nearly $1.4 billion over the same two days. After accounting for GBTC’s outflows, this indicates a net inflow of over $818 million into the U.S. spot Bitcoin ETF market during the initial two trading days, despite broader losses in the Bitcoin market.
On January 16, Arkham data revealed additional outflows of $376 million in Bitcoin from the Grayscale Bitcoin Trust by 7:17 pm UTC. Some traders attribute these outflows to the comparatively higher fees charged by GBTC, particularly its 1.5% management fee, criticised for being higher than most competitors.