6 industry experts are examining Grayscale’s Pandora box as GBTC shares worth 16,240 Bitcoin will be unlocked tomorrow

A number of shares in the Grayscale Bitcoin Trust, valued at nearly 40,000 bitcoins, will be unlocked in July after the six-month lock-up period expires.

Due to the nature of the Grayscale Bitcoin Trust, institutional investors buying the fund directly must hold the shares for six months before selling them on the secondary market. This is an indirect investment option for investors on the stock exchange.

Currently 1 GBTC represented for 0.000939973 BTC.

Several embargo periods will end in July and with a total of 650,000 bitcoins in funds, around 5% of the funds could be sold over a period of several weeks. With Grayscale being the largest Bitcoin fund, some investors may fear that the GBTC sell-off will put pressure on GBTC and the price of Bitcoin in general.

July 17th is one of the largest unlock days with GBTC shares valued at 16,240 Bitcoins available for trading, according to Bybt.com.

Source: Bybt

Here are 6 crypto experts’ views on the impact of unlocking on the bitcoin market.

1. Kraken intelligence

Kraken Intelligence researchers suggest that unlocking could put bullish pressure on GBTC and Bitcoin.

“Large institutions, which make up a significant percentage of GBTC holders, will be releasing their shares this month. They can be bought to take advantage of Grayscale Premium – the wide spread and yield between the fund’s net asset value and the spot price – and also have the option to short bitcoin on the spot and futures markets so as not to be inadvertently affected by price movements “.

If institutions decide to leave their positions, they will have to buy bitcoin from the spot market to cover GBTC. If so, this phenomenon could give the Bitcoin price a boost.

2. JP Morgan

In June, JPMorgan stated that the sale of GBTC shares was a “headwind” for Bitcoin.

“As a reminder to our readers, last December and last January saw the highest monthly inflows into GBTC, $ 2 billion and $ 1.7 billion, respectively, reflecting GBTC’s substantial premium received from hedge funds and other investors is traded. When the six-month lock-up period ends in June and July, these investors will likely sell at least some of the GBTC stock, putting pressure on GBTC price and the Bitcoin market as a whole.

3. Amber group

Amber Group cryptocurrency financial services company suspect that institutional investors who borrowed bitcoin in early 2021 to take advantage of the trust’s high premium will now have to buy back bitcoin on the spot market to repay the debt.

“Much of the bearish chatter about unlocking GBTC while ignoring registration funding with physical (debt) Bitcoin will eventually lead to spot market purchases.”

4. William Quigley, co-founder of Tether

Co-founder of the world’s largest stablecoin, Tether, says there may not be an immediate sell-off on the expiration date as some institutions that bought themselves from GBTC six months ago are now losing money.

“Some of them will definitely stop selling immediately to avoid losses.”

Quigley also noted that Grayscale’s decline in net asset value (NAV) could indicate lower institutional demand for the once-coveted product. He does not see this as a sign that institutional interest in Bitcoin is waning, but rather as a sign that institutions are buying Bitcoin in other ways, for example through ETFs from Canada.

5. Ryan Todd, The Block Crypto

Ryan Todd, a research analyst at The Block Crypto, said the market could be on high alert for negative catalysts in the crypto market.

“I think the lock-up period points to the market gloom in the summer and a correction of more than 50% from the Bitcoin market high.”

He added that with the NAV continuing to decline, many investors may not be able to sell their GTBC stock after the lock-up period expires. In fact, investors may need to buy more bitcoin.

“There is even an argument that some investors seeking a market neutral trading strategy to collect a GBTC premium by borrowing bitcoin and depositing it into a trust 6 months ago need to buy physical bitcoins now to repay the loan . “

6. Sam Bankman-Fried, FTX CEO

According to Sam, GBTC stocks released in the secondary market are “not really important” to Bitcoin but do not rule out an opportunity.

“Remember, most GBTC creators are arbitrage. Most would rather place a long order than buy in the market. The activation requirement does not matter for Bitcoin, if people sell GBTC, most of them will buy Bitcoin against the pressure to sell. “

Annie

Bitcoin magazine

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