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• With 650,000 bitcoins in the trust, Grayscale is set to see expiration of many lockup periods in July.
• Researchers from Kraken Intelligence think that GBTC’s lockup expiration may offer upside pressure on GBTC prices as well as bitcoin prices.
• JPMorgan thinks that the upcoming GBTC sell-off may be a ‘headwind’ for the trust as well as the token.
The Grayscale Bitcoin Trust (GBTC) is again set to unlock its 40,000 bitcoin in a highly anticipated lockup expiration by the end of July. The experts think that GBTC unlocking would only increase the prevailing selling pressure of the market. Analysts from JPMorgan and Chase think that this will definitely contribute to the downward pressure on bitcoin’s price. However, another group of analysts think that despite investors’ high anticipation, GBTC unlocking may not have much effect on the token’s volatility.
5% of the Grayscale’s Bitcoin trust may be sold in the coming weeks
According to Grayscale’s policies, all the institutional investors who purchased the funds directly were supposed to hold them for at least six months before they resell them on the market. With 650,000 bitcoins in the trust, Grayscale is set to see expiration of many lockup periods in July. It is possible that approximately 5% of the Grayscale’s Bitcoin trust may be sold in the coming weeks. However, some experts seem to have been worrying because Grayscale is the largest bitcoin fund, a sell-off may exert downward pressure on its Bitcoin Trust as well as the token. With 16,240 bitcoin available for trading, July 17 is anticipated to be the largest days of the unlock period.
Kraken Intelligence Experts Thinks That the GBTC Sell-off may Increase Upward Pressure
However, researchers from Kraken Intelligence explained that GBTC’s lockup expiration may offer upside pressure on GBTC prices as well as bitcoin prices. The researchers said that a considerable portion of GBTC’s is owned by large institutions. The institutions most likely bought them to profit from the Grayscale Premium – the once-hefty, and lucrative, disparity between the fund’s net asset value and spot price . They also likely shorted bitcoin in the spot and futures market so as not to be inadvertently impacted by price volatility. However, in case the institutions resolve to relax their positions in the market they will have to purchase GBTC from the spot market.
JPMorgan Analysts Think That the Upcoming Unlock May be a Headwind for the Token
However, analysts from JP Morgan have an entirely different view and think that the upcoming GBTC sell-off may be a ‘headwind’ for the trust as well as the token.
The JPMorgan researchers once again reminded the readers that last December and last January had experienced the highest monthly inflows into GBTC, of $2bn and $1.7bn, respectively, reflecting to a significant extent GBTC premium monetization trades by hedge funds and other investors. As the six-month lock up period expires in June and July these investors are likely to sell at least some of their GBTC shares, exerting downward pressure on GBTC prices and on bitcoin markets more generally.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
