A recent study by the American cryptocurrency exchange Coinbase reveals a pivot in crypto market dynamics, with investors now concentrating more on the activities within Bitcoin spot exchange-traded funds (ETFs), particularly those involving the Grayscale Bitcoin Trust (GBTC). This shift occurred as the marketplace observed its first net weekly outflow in two months.
Grayscale Trust outflows prompt Bitcoin price fluctuations
Coinbase’s recent analysis details an $836 million exodus from the U.S. spot Bitcoin ETFs in just a few days, a movement that contributed to the drop in Bitcoin’s valuation to under $63,000. The Grayscale Bitcoin Trust alone saw outflows amounting to $1.83 billion in a four-day span, presenting a stark contrast to the inflows other spot ETFs have experienced recently. This discrepancy suggests investors might be reallocating their capital, according to Coinbase analysts, who also cite GBTC’s higher management fees as a possible factor for the selling pressure.
Genesis Global’s transaction activities linked to GBTC’s outflows
The report indicates that the bankruptcy desk of Genesis Global could be a significant force behind the recent sell-off, identifying it as responsible for offloading 35.9 million GBTC shares. Genesis further leveraged 30.9 million shares to secure a $1.2 billion loan from Gemini Earn customers. While Genesis has reached an agreement with Gemini for the return of these assets, the payment awaits judicial consent. Coinbase highlights the correlation between the timing of GBTC share movements and Genesis Global’s financial troubles.
Amid the ongoing speculation, Coinbase suggests that the impact of the GBTC outflows on Bitcoin’s market performance may be mitigated by the fact that the majority of creditor settlements are likely to occur using cryptocurrency, rather than fiat money, which could ultimately have a neutral effect on Bitcoin’s value.