will be able to sell $1.3 billion in GBTC

Not exactly good news for Bitcoin coming from Genesis.

In fact, the bankruptcy court authorized Genesis Global Holdco LLC to sell approximately 35 million shares of Grayscale Bitcoin Trust (GBTC) for a total value of more than $1.3 billion.

The cryptocurrency lender, which went bankrupt after the bankruptcy of FTX, is preparing to pay off its creditors, including former customers who lent it digital assets, liquidating all liquid assets to raise money in dollars.

Bitcoin news: Genesis marketing

Bloomberg report that Judge Sean Lane said he would grant Genesis’ request to sell GBTC shares, and also reports that the sale will be made temporarily with the help of a broker.

More than 35 million shares GBTC will also sell more than 11 million shares of Grayscale Ethereum Trust for an additional value of more than $200 million.

As of today, there are still 517 million GBTC shares in circulation, so the Genesis sale is equivalent to less than 7%.

Since becoming an ETF on January 11 this year, GBTC has already liquidated more than 25% of the BTC it held as collateral for its shares.

This means that in just over a month, three and a half times the number of shares that Genesis is likely to return were returned to the Grayscale Bitcoin Trust.

In fact, a portion of the GBTC shares traded on the markets over the last several months ended up being delisted by the Grayscale Bitcoin Trust, and it is speculated that 35 million Genesis shares will also have to be delisted. .

Given that for every GBTC share there is less than 0.9 thousand Bitcoin as collateral, if 35 million Genesis shares were withdrawn from the market it would mean that Grayscale Bitcoin Trust would have to liquidate another 31,000 BTC. So far, in just over a month, it has deleted nearly 160,000.

Impact on Bitcoin price

These numbers show that the impact on the Bitcoin price of such sales may even be significant.

In fact, it should be emphasized that in the second half of January Grayscale Bitcoin Trust sold more than 10,000 BTC on average per day for about ten consecutive days, for a total of more than 100,000 Bitcoin.

Those that the fund could be forced to sell if it had to offer all 35 million Genesis shares on the market are less than a third, and are unlikely to be liquidated all together, given that the sale of Genesis will take place over time.

In those ten days that Grayscale deleted on average more than 10,000 BTC per day, the price of Bitcoin first fell below $39,000, but then returned to more than $40,000.

Ignoring the mini-Bubble the day the new ETFs landed on the markets, which brought the price of Bitcoin up to $ 49,000 in a very short time, the initial price was around $ 44,000, while after the end of the great sale of GBTC it had increased. up to 43,000 $. In the following days it rose first to $48,000 and then to $52,000.

This leads one to think that, if Genesis sales are temporarily reduced, it may have little effect on the price of Bitcoin, and that effect may only be short-lived.

In fact, yesterday when the news came out, the markets practically ignored it, given that just yesterday the price rose from less than $50,000 to more than $52,000.

The role of other ETFs

Some ETFs are pushing the price of Bitcoin these days.

That is, while Grayscale Bitcoin Trust liquidated around 160,000 BTC, BlackRock ETF (IBIT) bought more than 105,000, and that of Fidelity around 80,000. So these two ETFs alone together have already bought and traded more BTC than GBTC has liquidated.

To these must be added at least two other new Bitcoin ETFs, ARKB by Ark and BITB by Bitwise which bought around 23,000 and around 19,000 BTC.

So considering just these five new ETFs, while GBTC liquidated nearly 160,000 BTC, the other four withdrew over 220,000 from the markets.

It is clear that this force may have contributed significantly to the rise in the price of Bitcoin, given that during the first half of February alone it went from $ 43,000 to $ 52,000.