Selling Pressure in Bitcoin May Be Over, According to JPMorgan

According to a report by the bank, approximately $1.3 billion has been transferred from GBTC to new spot bitcoin ETFs, representing an outflow of approximately $3 billion per month.

JPMorgan suggests that Grayscale’s GBTC profit-taking is probably finished, which could reduce selling pressure on Bitcoin.

📈 In a recent research report, JPMorgan suggests that the selling pressure in bitcoin (BTC) caused by investors taking profits from the Grayscale Bitcoin Trust (GBTC) may be mostly in the rearview mirror. This is welcome news for the crypto market, as bitcoin has seen a drop of over 20% in the two weeks following the launch of spot bitcoin exchange-traded funds (ETFs) in the U.S.

📉 Profit-taking in GBTC by investors who had purchased the fund at a discount was cited as one of the primary reasons for the correction. Before its conversion to an ETF, GBTC served as one of the few ways for U.S. investors to gain exposure to bitcoin without owning the actual cryptocurrency. With over $20 billion in assets under management, it remains the largest bitcoin investment product.

💰 JPMorgan had previously estimated an outflow of approximately $3 billion from GBTC due to profit-taking from the “discount to net asset value” (NAV) trade. Notably, when investors take profits from this trade, money leaves the crypto market, exerting downward pressure on bitcoin’s price. “Given $4.3 billion has come out already from GBTC, we conclude that GBTC profit taking has largely happened already,” stated analysts led by Nikolaos Panigirtzoglou, adding that most of the downward pressure on bitcoin from this channel should now be behind us.

💸 The estimates from JPMorgan suggest that around $1.3 billion has moved from GBTC to newly created spot bitcoin ETFs, which are more cost-effective. This translates to a monthly outflow of $3 billion. These outflows are likely to continue if Grayscale is slow to lower its fees, and they could even accelerate if other spot ETFs gain enough size and liquidity to compete with GBTC.

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🔁 In addition to GBTC profit-taking, the bankruptcy estate of crypto exchange FTX has reportedly sold around $1 billion worth of GBTC since its conversion to an ETF. This has added to the selling pressure on bitcoin.

Q&A on Bitcoin Selling Pressure

Q: Why did bitcoin experience a significant drop after the launch of spot bitcoin ETFs in the U.S.?

A: The launch of spot bitcoin ETFs in the U.S. led to investors taking profits from the Grayscale Bitcoin Trust (GBTC), causing selling pressure on bitcoin.GBTC was one of the few investment vehicles that allowed U.S. investors to gain exposure to bitcoin without owning the underlying cryptocurrency. With the introduction of spot bitcoin ETFs that are more cost-effective, investors have been moving their funds from GBTC to these new options.

Q: What impact does profit-taking in GBTC have on bitcoin’s price?

A: When investors take profits from GBTC, money leaves the crypto market, which puts downward pressure on bitcoin’s price. JPMorgan estimated that there has been an outflow of around $3 billion from GBTC due to profit-taking, contributing to the recent correction in bitcoin’s price.

Q: How much money has moved from GBTC to spot bitcoin ETFs?

A: JPMorgan estimates that about $1.3 billion has moved from GBTC to newly created spot bitcoin ETFs. These ETFs are more cost-effective, resulting in investors choosing them over GBTC. This outflow is equivalent to a monthly outflow of $3 billion.

💡 While the selling pressure from GBTC profit-taking may be mostly behind us, it is crucial to keep an eye on potential outflows from GBTC to spot bitcoin ETFs. It will be interesting to see if Grayscale lowers its fees and how other ETFs compete with GBTC in terms of size and liquidity. These factors could have significant implications for bitcoin’s price movement in the future.

🔮 Looking ahead, it is important for investors to stay informed about market trends and developments in the crypto industry. The competition between GBTC and spot bitcoin ETFs will likely heat up, and it will be essential to assess the potential impact on bitcoin’s price. Ultimately, making well-informed investment decisions is key to navigating the dynamic cryptocurrency market.

🔗 Reference List: 1. Grayscale’s GBTC Has Moved More Than 100K BTC to Exchange Since Spot Bitcoin ETF Launch 2. Solana Price Prediction: $22 billion trading volume comes to SOL overtaking Binance Coin 3. Witness discount bytes that can be bought cheaper than others 4. FTX’s bankruptcy estate reveals GBTC sales 5. Grayscale’s GBTC Could See Another $1.5B in Sales From Arb Traders: JPMorgan

🤝 What are your thoughts on the selling pressure in bitcoin and its impact on the market? Share your opinions and join the discussion! Remember to hit the like button and share this article with your friends to spread the knowledge. Together, we can navigate the exciting world of cryptocurrencies! 💪💰✨

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