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Qadir AK
Qadir AK
Author
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jan 22, 2024 09:58 UTC
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Bitcoin Tumbles as Grayscale Sells: Experts Clash on Future Price
Grayscale selling triggered a 2.72% decline, but new ETFs absorbed the released funds quickly ($27 billion in a week).
Predictions vary - Terry expects continued selling and criticizes Grayscale's fees, while Novogratz sees investor shift to other ETFs.
GBTC's selling (60,000 BTC) was offset by other ETFs buying (72,000 BTC), stabilizing the market.
The crypto market is witnessing a notable downturn in Bitcoin prices, with the world’s largest cryptocurrency facing selling pressure and dropping by an additional 2.72% to $40,766. This decline is attributed to a strategic sell-off by Grayscale Bitcoin Trust (GBTC) post a recent share sale. Interestingly, the funds released from this liquidation are swiftly finding a home in new Bitcoin ETFs, accumulating a remarkable $27 billion in just a week.
With such a massive event, a pertinent question arises: Is Bitcoin currently priced in or out?
Expert Insights and Predictions
Cryptocurrency analyst Chris J Terry forecasts a continued flat or downward trend until the completion of GBTC’s liquidation, expecting a sizable $25 billion in selling activity in the coming weeks. Terry critiques Grayscale’s decision to maintain high ETF fees at 1.5%, deeming it a strategic misstep with potential consequences for the market and broader adoption.
Read More: Why is Bitcoin Price Dropping Despite ETF Approval?
Clash of Views
Grayscale CEO Michael Sonnenshein disagrees with the assessment, countering that high GBTC fees are not driving strong liquidations.
On the other hand, Galaxy Digital CEO Mike Novogratz anticipates some selling activity in GBTC but believes investors will transition to other ETFs, particularly endorsing $BTCO. Novogratz sees this shift as an avenue for older investors (boomers) to enter the crypto market, highlighting the potential for increased leverage with 4×5 times exposure to Bitcoin through $BTCO.
Despite short-term market challenges, Novogratz remains optimistic about Bitcoin’s future, foreseeing the current issues subsiding and Bitcoin’s value seeing an upward trajectory in the next six months.
Post-GBTC Dynamics
He notes significant outflows post GBTC’s ETF transformation, but the equilibrium is restored as investors migrate to lower-fee ETFs. In simpler terms, while GBTC sold about 60,000 Bitcoins, other Bitcoin ETFs purchased around 72,000 Bitcoins, effectively counterbalancing GBTC’s sales impact.
Moreno attributes Bitcoin’s price volatility to short-term traders and whales who opted to sell after last year’s surge, speculating that the ETF approval might have triggered a “sell-the-news” event.
Also Read: Is Grayscale “Dumping” Bitcoin on the Market? Here’s the Truth
What Does the Pi Cycle Analysis Tell Us?
An insightful analysis by On-chain College emphasizes the importance of the Bitcoin 111-day moving average in Pi Cycle analysis. Overlaying this with the short-term holder cost basis for BTC, the narrowing gap between these indicators hints at a critical level to monitor at $37.7K to $38.1K.
Is Bitcoin overvalued or poised for a comeback?
Yes 
No 
