Bitcoin price was around the $43,000 mark when it suddenly experienced a drop of about $1000, which also impacted altcoins. We saw this drop begin with the early circulation of expected news. Should investors be worried?
Why Are Bitcoin and Cryptocurrencies Falling?
GBTC Spot Bitcoin ETF issuer Grayscale transferred 9,317 BTC to the Coinbase exchange a few minutes ago. The total size of the transaction is around $380 million, and it seems to be connected with the dominant sales of GBTC during the first two trading days. GBTC, which has zeroed out its negative premium, now brings investors immediate sales with the ETF conversion, yielding returns of 10% or even more.
This meant that GBTC investors now needed to sell. Following the sales worth hundreds of millions of dollars, Grayscale’s transfer of $380 million in assets to Coinbase led to speculation that the underlying asset amount could be reduced.
The massive sale rumor is not entirely accurate. Grayscale could supply these assets to other issuers via OTC on Coinbase or sell them to different institutional buyers. Selling such large amounts in spot markets would be against the company’s interest, so there is potential for BTC price to recover shortly.
However, continued transfers or dominant sales on the Coinbase side could increase panic and lead to a continued decline.
