HomeNewsFTX's $1 Billion Grayscale Bitcoin ETF Sell-Off Sparks Crypto Market Turbulence

FTX’s $1 Billion Grayscale Bitcoin ETF Sell-Off Sparks Crypto Market Turbulence

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  • FTX’s bankruptcy estate sold approximately $1 billion worth of Grayscale’s Bitcoin ETF, impacting the market significantly.
  • Bitcoin’s price has experienced a downturn since the approval of several Bitcoin ETFs, with FTX’s sale contributing to market volatility.

FTX’s Significant Market Move

In a substantial move within the cryptocurrency market, FTX’s bankruptcy estate has offloaded around $1 billion of Grayscale’s Bitcoin ETF. This sale represents a major portion of the recent outflows from the Grayscale Bitcoin Trust (GBTC), which has been converted into an exchange-traded fund (ETF).

Market Dynamics Post-ETF Approval

Since the U.S. Securities and Exchange Commission approved a slew of Bitcoin ETFs, including the transformation of the longstanding GBTC into an ETF, the market has witnessed remarkable shifts. The Grayscale fund, previously a closed-end fund with nearly $30 billion in assets, transitioned into an ETF amidst the introduction of new funds by major players like BlackRock and Fidelity.

While these new funds have seen inflows, GBTC experienced significant withdrawals. The data reveals that FTX, a major crypto trading entity, played a pivotal role in this dynamic. FTX liquidated its entire GBTC holdings of 22 million shares, which significantly contributed to the selling pressure in the Bitcoin market.

This strategic move by FTX, aiming to capitalize on the price disparity between Grayscale trust shares and the net asset value of the underlying Bitcoin, has influenced the broader market. The liquidation of such a substantial holding by a bankruptcy estate is a relatively rare occurrence in the crypto market, potentially easing selling pressures post-sale.

As the cryptocurrency landscape continues to evolve, the interplay between ETFs, large-scale trades, and market dynamics remains a critical area to monitor for both investors and enthusiasts.

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Bhushan Akolkar
Bhushan Akolkar
Bhushan is a FinTech enthusiast and possesses a strong aptitude for understanding financial markets. His interest in economics and finance has drawn his attention to the emerging Blockchain Technology and Cryptocurrency markets. He holds a Bachelor of Technology in Electrical, Electronics, and Communications Engineering. He is continually engaged in a learning process, keeping himself motivated by sharing his acquired knowledge. In his free time, he enjoys reading thriller fiction novels and occasionally explores his culinary skills. Business Email: info@ethnews.com Phone: +49 160 92211628