Bitcoin drops to $39,450 following FTX’s $1 billion GBTC shares sell-off revelation

The world’s largest cryptocurrency, Bitcoin, lost the $40,000 milestone as selling pressure from Grayscale’s GBTC continued unabated.

The price of Bitcoin (BTC) in the early morning of January 23, 2024, dropped to $39,450, the lowest since early December. Since reaching its peak at $48,969 on January 11, BTC has declined by nearly 20%.

In the past 12 hours, the cryptocurrency market recorded over $140 million in liquidated derivative orders, with long positions accounting for 82.7%.

The retreat has been attributed to the pressure of GBTC share conversions, forcing the Grayscale fund to sell the bitcoin it holds to raise funds for investors.

On the evening of January 22, Grayscale transferred 19,260 BTC to the Coinbase exchange, equivalent to over $900 million. This is the largest transfer since the approval of the Bitcoin spot ETF, surpassing transactions on January 12 (4,000 BTC – $183 million), January 16 (9,000 BTC – $384 million), January 17 (18,638 BTC – $791 million), and January 18 (12,870 BTC – $531 million).

A shocking revelation by CoinDesk indicates that one of the organizations selling the most GBTC this week is the bankrupt cryptocurrency exchange FTX.

Specifically, sources within CoinDesk affirm that FTX has liquidated 22 million GBTC shares since the fund was approved to become a Bitcoin spot ETF, with an estimated value of up to $1 billion. These shares were permitted for sale by the court in November 2023.

News outlets suggest that as selling pressure from FTX subsides, Grayscale may no longer be under pressure to sell large quantities of Bitcoin as it has in recent days. However, the fund still holds over 573,000 BTC, valued at $22.8 billion.

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After the liquidation of GBTC, Grayscale’s sister company, Alameda Research, also withdrew its lawsuit against Grayscale.

According to Bloomberg data, as of the end of trading on January 22 (U.S. time), 11 Bitcoin spot ETFs recorded a trading volume of $2 billion, with Grayscale’s GBTC still accounting for over half at $1 billion.

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