The world’s largest cryptocurrency by market capitalization Bitcoin (BTC) dropped swiftly below $43,000 but is now trading at $43,317.92, after a 5.90% price plunge in the last 24 hours.
GBTC Dump and BTC Slump
Veteran crypto trader crypto trader and the CEO of Blockchain Investment Fund and Advisory service Ran Neuner attributes the price dip to the recent Grayscale Bitcoin Trust (GBTC) dump-off.
He clearly stated that the price of BTC is nosedive because people are dumping their GBTC shares.
He highlighted the fact that over $25 billion worth of Bitcoin had been held in Grayscale’s GBTC for many years. At the time, there was no option of selling them until redemption opened just after the SEC approved spot BTC ETF. Once opened, holders saw it as an opportunity to opt out of the offering.
Now, “as they exit the Bitcoin must be sold on the market. Now they are taking a discount again!” he said.
Bitcoin Price is dumping as people are dumping their GBTC shares.
GBTC held $25bn+ worth of Bitcoin that has been locked up for years with no option to be sold. As soon as the redemption option opened, for the first time people are starting to exit – as they exit the Bitcoin… pic.twitter.com/EqHgpHyVdd
— Ran Neuner (@cryptomanran) January 12, 2024
Neuner acknowledged that the GBTC holding of $25 billion is large, citing that if just 20% of it is redeemed, that would mean that $5 billion is in sales on the market. He does not think that all of the ETF providers have this much demand in the near term, thus forcing the price lower.
There is a likelihood that the selling pressure will continue for a while but it is worth noting that Bitcoin is not the only token caught up in the bear movement as many altcoins have also been dragged to new daily lows.
Bitcoin Revival Plot Imminent
This impulsive reaction of Bitcoin to the GBTC dumping exercise is likely to be short-lived especially as the coin is expected to react to the SEC’s nod to the numerous spot BTC ETF applications in the long term.
It had earlier been predicted that Bitcoin would reach new highs with the coming of the Bitcoin ETFs. Even before now, the coin had started eyeing $50,000 levels.
Alongside the upcoming Bitcoin halving event, it is believed that Bitcoin will see up to a 6,000% increase. For the mean time, Bitcoin critic Jim Cramer has declared that the top is in for the digital currency as spot BTC ETF hype appears to be fading away.