Kraken refutes JPMorgan’s claim that “unlocking” GBTC shares will cause Bitcoin to decline
The Kraken exchange has joined a group of like-minded analysts that a new wave of Grayscale Bitcoin Trust (GBTC) stocks entering the secondary market could be good for bitcoin price.
Grayscale Bitcoin Trust, the world’s largest digital asset fund that provides institutional investors with access to Bitcoin through trust, currently holds 654,600 BTC, about 3% of total Bitcoin supply.
Institutional investors can join the fund by buying at net asset value – the value of the underlying bitcoin – but are subject to a six month lock-up period. Many investors joined the fund earlier this year, many of whom are now locked, which means many GBTC holders will soon be able to sell their shares in the secondary market.
A report from JPMorgan suggested that GBTC’s “unlocking” could lead to “downward pressure on GBTC and the Bitcoin market in general”. But analysts and investors, including Amber Group and Arca Funds, have suggested that unlocking GBTC for Bitcoin price could be really good.
According to a report from Kraken Intelligence, recent data suggests that GBTC shares worth nearly 40,000 BTC will unlock in July, or about $ 1.36 billion based on a Bitcoin price of $ 34,000.
“Despite the GBTC shares with a value of 40,000 BTC that were activated in July, the market structure indicates that the activation will have no effect on Bitcoin on the spot market.”
The release of GBTC shares is expected to accelerate this month | Source: Kraken Intelligence
According to regulatory records, most of the shares that will be released in July are owned by large institutions. Kraken says these large institutions likely bought GBTC shares using Bitcoin in order to receive a premium over the net asset value (NAV) at which the shares trade.
“Once it is known whether these GBTC buyers are market participants – those who hedge their purchases by selling Bitcoin – or newbies – natural buyers – it is possible to assess the impact of selling GBTC shares on Bitcoin (if any) determine.”
Meanwhile, JPMorgan strategists, led by Nikolaos Panigirtzoglou, wrote in a note last month that the unlocking of GBTC shares poses a downside risk to Bitcoin.
“The sale of GBTC shares, which expire in June and July of the six-month lock-up period, appears to be having a negative impact on Bitcoin.”
According to Coindesk