Bitcoin drops to $40,700 as conversion pressure from Grayscale's GBTC maintains
Grayscale continues to have large Bitcoin deposits to Coinbase after their ETF was approved.
Minutes after the US stock market opened for trading on January 17, asset management company Grayscale carried out a series of transactions transferring Bitcoin to Coinbase, with a value of 18,638 BTC, equivalent to approximately 791 million USD.
Thus, this is the third consecutive trading day that Grayscale has moved BTC, after January 12 (4,000 BTC - 183 million USD) and January 16 (9,000 BTC - 384 million USD) - with a total of The number to date is 31,638 BTC, worth more than 1.3 billion USD.
According to Arkham, Grayscale still holds more than 617,000 BTC ($26.2 billion) and billions of dollars in Ethereum and altcoins used in the company's other investment products.
There has been much speculation that Grayscale is facing great conversion pressure from investors of this ETF, because after a long time holding GBTC shares and suffering losses in the 2021-2022 period, many people want to Withdraw capital to finalize money.
GBTC's 1.5% management fee is another reason for investors to look to other more attractive options being offered by other Bitcoin spot ETFs to attract buyers.
As reported, after the first 3 days of trading, newly approved Bitcoin spot ETFs by the SEC recorded a trading volume of up to 9.6 billion USD, led by Grayscale, BlackRock and Fidelity. Accounting for half of Grayscale's volume, this is also the only ETF that recorded cash outflows due to divestment.
Bitcoin price on the evening of January 17 did not fluctuate much, and was not as severely affected as the first time Grayscale transferred money to the exchange on January 12.
Despite surpassing the $14 billion trading volume mark, Bitcoin spot ETFs are facing large conversion demand from Grayscale.
Late at night on January 18 and early in the morning of January 19, the Bitcoin market witnessed a new adjustment, bringing BTC from 42,800 USD to 40,700 USD, the lowest since December 18.
The reason for this decrease is unclear as there are many mixed opinions on social networks. However, the biggest argument is still the argument that Grayscale fund sells BTC to meet the asset conversion needs of investors.
On the evening of January 18, Grayscale transferred an additional 9,840 BTC to Coinbase, bringing the total number of Bitcoins posted to the exchange since the Bitcoin spot ETF opened for trading to 41,478 BTC (worth 1.78 billion USD).
This is the fourth consecutive trading day that Grayscale has moved BTC, after January 12 (4,000 BTC - 183 million USD), January 16 (9,000 BTC - 384 million USD) and January 17 (18,638 million USD). BTC - 791 million USD).
Grayscale still holds nearly 618,000 BTC, worth $25.5 billion.
Ending the trading day on January 18 (US time), the 11 Bitcoin spot ETFs approved by the SEC last week reached a trading volume of 2.1 billion USD, bringing the total volume in the past 5 days to 14 billion USD.
In/out cash flow data shows that GBTC recorded an outflow of up to 582 million USD on January 18.
Grayscale CEO believes that the "war" of competition over Bitcoin spot ETF management fees will be a potential cause of this outcome in the future.
In an interview with CNBC, Mr. Michael Sonnenshein - CEO of investment management company Grayscale Investments - predicted that most of the 11 Bitcoin spot ETFs have been approved by the US Securities Commission (SEC) recently. will not be able to coexist in the future.
As reported, the SEC agreed to "green light" the Bitcoin spot ETF at dawn on January 11, 2024, and 11 investment funds can begin trading the next day. In the first trading session, a trading volume of 4.6 billion USD was recorded from more than 700,000 accounts, with Grayscale's GBTC leading the way at 2.3 billion USD.
Before reaching the final decision from the SEC, 11 investment funds spent many months submitting an application for registration under the common form S-1 along with many required content amendments, including updates. Management fee schedule for their Bitcoin spot ETFs. Notably, many organizations announced "surprisingly low" ETF management fees compared to the general predictions of analysts:
+ BlackRock/iShares offers fees of just 0.12%, increasing to 0.25% in the first year or until the ETF reaches $5 billion in assets.
+ The 5 management funds Ark Invest/21Shares, Bitwise, WisdomTree, Fidelity and Invesco/Galaxy announced free management fees for the first 6 months, which will then increase until the ETF reaches the required asset value.
+ Valkyrie is no less competitive and also announced a free management fee, but it will increase to 0.49% after 3 months.
+ VanEck, Franklin Templeton, and Hashdex offer flat fees of 0.25% - 0.29% - 0.9% respectively.
Most notable on this list is that Grayscale announced the highest management fee of 1.5% maintained fixed in the long term without any other "discount" incentives.
Mr. Michael Sonnenshein said that Grayscale's Bitcoin spot ETF management fee is calculated based on the fact that "they are the largest Bitcoin fund, have a proven 10-year track record of successful operations and have a large number of house listings." diversified investment".
Other spot Bitcoin ETFs have low management fees because their products do not have a long track record. Not only that, these organizations are trying to attract a large number of investors with fee incentives.
Mr. Michael Sonnenshein's comments were made in the context of Grayscale's continuous move to transfer large amounts of hundreds of millions of dollars in Bitcoin to the exchange on January 13 and January 17, 2024, causing the price of BTC from around 42,000. USD dropped to 40,700 USD under pressure to convert assets to meet the needs of investors to convert assets.
Agreeing with CEO Grayscale, the founder of Quantum Economics also sees the possibility of failure of the majority of ETF issuers in the long term, because the majority of investors prefer to keep their assets or choose to self-save. sign.
In contrast to the explosion in Bitcoin spot ETF trading volume in the first 2 days of its launch, the volume on the 3rd day decreased by half compared to the first 2 days and there has been no sign of "improvement" until now.
