Grayscale Bitcoin Outflows Surge Post-ETF Launch, Signalling Potential Sell-Off Exhaustion?

Grayscale banner and Bitcoin on an illuminated board with "SELL" written on it

Grayscale, the world’s largest digital asset manager, has witnessed a significant outflow of Bitcoin (BTC) since the debut of its spot Bitcoin ETF, GBTC, on January 11, 2024. According to blockchain analytics firm Arkham Intelligence, nearly 113,000 BTC have been shifted from Grayscale wallets, primarily to Coinbase Prime, suggesting potential preparation for large-scale selling. This comes amidst declining GBTC trading volume, raising questions about a potential exhaustion of the recent sell-off.

The Grayscale BTC Outflow

The substantial movement of Bitcoin from Grayscale wallets, representing approximately 6% of its total holdings, has sparked speculation about the company’s future plans. Some believe it could be related to institutional investors selling their GBTC holdings through Coinbase Prime, a platform catering to larger clients.

Declining GBTC trading volume further fuels the sell-off exhaustion theory, as it suggests a waning interest in offloading the trust’s shares. If the significant BTC outflows from Grayscale translate into large-scale selling, it could put downward pressure on Bitcoin’s price in the short term.

A Possible Rebound

However, if the selling wave subsides due to exhaustion, as hinted at by the drop in GBTC trading volume, Bitcoin could regain its footing and potentially experience a price rebound. The situation remains fluid, and close monitoring of Grayscale’s actions and Bitcoin’s price movements is crucial for navigating the evolving market dynamics.

Accordingb to Eric Balchunas, senior ETF analyst at Bloomberg,

“The good news: GBTC outflows trending down. The bad news: so are the Nine’s. That leaves us with TOTAL ROLLING NET FLOWS of +$824m. Also $ARKB and $BITB crossing half a billion is remarkable. For any normal launch in first month that’s considered blockbuster-level success.”

Grayscale’s official stance on the BTC outflows and its future plans for a spot Bitcoin ETF remains unclear, adding to the market uncertainty. The coming weeks and months will be crucial in determining whether the recent sell-off has run its course or if further downward pressure on Bitcoin’s price is to be expected.

Author: Jinka

Jinka is a self-trained crypto journalist, passionate about happenings in the industry.