Investors have sold over $2 billion worth of Grayscale Bitcoin Trust (GBTC) since its conversion into an exchange-traded fund (ETF) earlier this month, CoinDesk reported, on Monday. A significant portion of this outflow is attributed to FTX, which reportedly dumped around 22 million shares, representing nearly $1 billion in value, according to private data reviewed by CoinDesk and information from two individuals familiar with the matter.
The conversion of GBTC into an ETF occurred in early January, following approval from the U.S. Securities and Exchange Commission (SEC). While new bitcoin ETFs from companies like BlackRock and Fidelity have experienced inflows, GBTC has seen substantial outflows, with FTX's contributing significantly to the sell-off.
FTX's 22 million shares of GBTC were sold, bringing its ownership down to zero. This selling pressure from FTX, resulting from the bankruptcy liquidating holdings, is considered a unique event that could ease the overall selling pressure on GBTC.
Bitcoin's price has experienced a decline since the approval of bitcoin ETFs, which contrasts with the optimistic forecasts that preceded the SEC's decision. Bitcoin ETFs were anticipated to provide a more accessible investment avenue for retail investors, but the market has witnessed a downturn instead.
FTX leveraged the price disparity between Grayscale trust shares and the net asset value of underlying bitcoin to capitalize on trading opportunities. As of October 25, 2023, FTX held 22.3 million GBTC valued at $597 million, according to a filing from November 3, 2023. The value of FTX's GBTC holding increased to around $900 million on January 11, the first day of Grayscale's bitcoin ETF trading on NYSE Arca.