According to a report from JPMorgan, a significant number of Grayscale Bitcoin Trust (GBTC) shares were sold at a discount to net asset value (NAV) in 2023. According to the bank, the increase in sales of discounted GBTC is in anticipation that the investment vehicle will be converted into a spot Bitcoin (BTC) ETF (Exchange Traded Fund).
According to JPMorgan, GBTC has seen $2.5 billion in inflows since the start of the year. Furthermore, the bank notes that the amount will increase to $2.7 billion when short interest is taken into account.
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According to analysts led by Nikolaos Panigirtzoglou: “Assuming this buying flow was primarily speculative in nature in anticipation of GBTC converting into an ETF, then it is likely that this $2.7 billion would come from GBTC as these investors take profits once GBTC is converted.”
Will Bitcoin Price Take a Hit?
Source: Money
According to analysts, if the $2.7 billion leaves the market, it could put downward pressure on BTC. However, if the amount flows into other BTC investment vehicles, the pressure on the price will be less. Still, the bank expects some of the $2.7 billion to leave the market. The outflow of funds could have a negative impact on the price of BTC.
Also Read: BlackRock Joins Grayscale in Pursuit of Spot Bitcoin ETFs: Talks with SEC
However, other analysts expect the crypto market to experience a bull run in early 2024, fueled by the Bitcoin (BTC) halving. Additionally, there is a possibility that the SEC (Securities and Exchange Commission) will approve a spot BTC ETF next year. Both developments could push the price of BTC to new heights. Investors have been asking about a spot BTC ETF for a long time. If approved, the asset could see a surge in institutional investment. Institutional interest is one of the biggest drivers of mass adoption.
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