At the moment, the sentiment around sees bitcoin (BTC) looking pretty nice. However, that’s not to say it’s all roses in the near future for the largest cryptocurrency.
Grayscale Bitcoin Trust
According to some analysts Within the world of crypto, something bad may be about to happen. This has everything to do with the giant Grayscale Bitcoin Trust.
It Grayscale Bitcoin Trust is the largest digital asset manager in the world. It gives users the opportunity to gain exposure to bitcoin by buying their GBTC shares.
Should someone buy these GBTC shares from Grayscale, they are obliged to hold them for a period of at least six months. After this, owners have the opportunity to sell these shares again. About 16,000 of these shares will be released in July, which is a concern for some. Converted, this equates to about 160,000 bitcoins or $5.5 billion dollars.
Indeed, some analysts believe that there are many owners of such stocks who, once they are no longer secured, want to sell. This can cause the price of bitcoin to drop significantly. This could even cause the bitcoin price to fall below the current price range comes true.
An analyst from the major US investment bank JPMorgan, Nikolas Panigirzoglou, states the following:
“Despite this week’s correction, we are reluctant to let go of the negative view of the bitcoin and crypto markets. While there are some positive signs to note, our signals generally remain bearish”
Correlation has already been noticeable in the past
In the period from April to June, about 139,000 bitcoins from the Grayscale Bitcoin Trust have already been released. At the time, this was accompanied by the gigantic crash of the bitcoin price. The price went from $65,000 to a low of $28,800 in a remarkably short time.
Lyn Alden, the founder of Lyn Alden Investment Strategy, states that the correlation between the release of GBTC shares and the crash of bitcoin is strong a while back. According to her, a similar scenario could play out if another 140,000 bitcoins from the Grayscale fund are released.
However, not everyone shares this view. Grayscale CEO Michael Sonnenshein states in an interview with Barron’s that he expects that not many shareholders will sell their shares. He argues that many buy the shares with a long-term view.
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