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- 1 Major surge in the sales of Grayscale Bitcoin Trust shares since the beginning of 2023: JPMorgan.
- 2 The bank highlights in its report that “a net $2.5 billion has flowed into the Grayscale Bitcoin Trust since the beginning of 2023.”
- 3 GBTC website states that the trust holds a total 620.85k Bitcoin’s worth $23.23 Billion.
The beginning of 2023 has brought many hopes for the approval of exchange traded funds (ETFs). A sharp surge in the purchase of Grayscale Bitcoin Trust (GBTC) shares was seen and the shares were being traded at deep discounts.
As per the research report of JPMorgan, the strengthening in the buying of GBTC shares comes amid great anticipation of the trust’s conversion to an ETF. The ETF is yet to be approved by the United States Securities and Exchange Commission (SEC).
According to the report published by the bank, a net $2.5 Billion has flowed into the Grayscale Bitcoin Trust since the beginning of 2023, if covered by the short interest, it will surge to $2.7 Billion.
Analyst Nikolaos Panigirtzoglou stated that “Assuming this buying flow was mostly speculative in anticipation of GBTC being converted to an ETF, then it is likely that this $2.7 billion would come out of GBTC as the investors take profit once GBTC gets converted.”
He added “If all the $2.7 billion exits the Bitcoin space completely then it might impact the trading price of Bitcoin.” The bank believes that “Still, the balance of risks for bitcoin prices is skewed to the downside in our opinion as some of this $2.7b is likely to completely exit the bitcoin space.”
Functions of Grayscale Bitcoin Trust
The trust is privately held and has invested heavily in Bitcoin, offering enthusiasts access to exposure to BTC as a security. Breaking the barriers of purchasing, securing and holding the bitcoin directly, shares are designed in a manner to track the live bitcoin market price with nominal fees.
Grayscale Bitcoin Trust works similar to SPDR Gold Trust which is known for its feature of physically backed gold ETF. Since the last few quarters GBTC has been trying hard to secure the approval of SEC to convert itself into an ETF.
The trust only issues a fixed quantity of shares to investors in exchange of traditional currency which is then diverted to purchase Bitcoin. The data available on GBTC website states that the trust holds a total 620.85k Bitcoin’s which are worth $23.23 Billion when writing.
It also holds Ethereum, ETC, LTC, BCH,ZEC, XLM, MANA, SOL, ZEN, LINK, LPT, BAT and FIL. On November 23, 2023,the secondary price was $30.45, primary price was $33.75 and the premium rate was -9.78%.
Bitcoin Price Overview
Since the beginning of 2023, Bitcoin price showed a positive momentum and when writing it was trading above $37k. In the intraday session BTC trading volume showed a negative momentum and slipped 24.18%.
As per market analysts the sudden surge in Bitcoin trading price was followed by the curiosity of giant investors and banks seeking SEC’s approval to establish them as exchange traded funds.
Disclaimer
The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
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.
