In a strategic move, the Grayscale Bitcoin Trust (GBTC) executed a transfer of 8,730 Bitcoin, valued at over $376 million, to Coinbase Prime deposit addresses on January 16. This action, as per data from blockchain analytics platform Arkham Intelligence, suggests a potential liquidation of Bitcoin holdings, possibly in response to a decline in GBTC’s share price.
Analysts speculate that these outflows from GBTC might be influencing the recent downward pressure on Bitcoin’s price. Despite this, Bitcoin seems to have found stability during the mid-day trading hours in the United States on January 16.
GBTC, one of the largest single holders of BTC globally, has undergone significant changes recently. As of January 11, investors gained the ability to redeem their shares for Bitcoin or a cash equivalent after the trust’s conversion into an exchange-traded fund (ETF). Authorized participants have since been able to purchase shares from investors and redeem them for the cash equivalent of the Bitcoin they represent.
This redemption process triggers the need for the trust to sell BTC to fulfill these redemptions, typically happening when the GBTC’s price is lower than the value of the BTC it holds.
Earlier on January 12, GBTC transferred $41 million to a Coinbase Prime wallet, hinting at potential BTC sales. Some traders speculated that this outflow contributed to Bitcoin’s sharp price decline that day.
Bloomberg analyst Eric Balchunas, citing Bloomberg Terminal, reported substantial outflows from GBTC, totaling $95.1 million on January 11 and $484.1 million on January 12. In contrast, other Bitcoin ETFs, such as iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund, received inflows of nearly $1.4 billion during the same period. Adjusting for GBTC’s outflows, this suggests a net inflow of over $818 million into the U.S. spot Bitcoin ETF market over the initial two days of its trading, despite broader market losses.
On January 16, Arkham data revealed additional outflows of $376 million in BTC from GBTC by 7:17 pm UTC. Critics point to the higher fees charged by GBTC, notably a 1.5% management fee, as a potential factor driving these outflows.
