JPMorgan analysts believe that the selling pressure caused by the Grayscale Bitcoin Trust (GBTC) on Bitcoin (BTC) may be coming to an end. According to the giant investment bank, the likelihood that investors have finished taking profits from GBTC suggests that the selling pressure on Bitcoin’s price will likely ease.
The Risk of GBTC Pressure on Bitcoin May Be Over
Analysts led by JPMorgan’s market strategist Nikolaos Panigirtzoglou noted in a market report dated January 25 that “profit-taking in GBTC is largely complete. This indicates that the downward selling pressure of GBTC on Bitcoin has largely dissipated.”
Grayscale’s Bitcoin fund has been trading below its net asset value since the beginning of 2021, and analysts pointed out a withdrawal of $4.3 billion from the fund since its conversion to a spot ETF on January 11. This withdrawal was attributed to previous GBTC investors selling their shares to take profits, and Bitcoin’s price dropping by about 20%, trading below $40,000 following the launch of multiple spot Bitcoin ETFs.
The JPMorgan analysts’ report followed data from the research arm of the BitMEX exchange, BitMEX Research, shared on social media platform X on January 25, confirming that there was a net outflow of $158 million on January 24 across 11 spot Bitcoin ETFs. Grayscale’s spot Bitcoin ETF saw an outflow of $429 million on January 24, while the latest data for January 25 shows outflows decreased to $394 million, marking the second-lowest trading day on record for outflows.
Data compiled by CC15Capital on January 24 shows that the total Bitcoin holdings across all 11 spot Bitcoin ETFs decreased by approximately 4,610 BTC, valued at around $184 million, within a single day.
The Rise of BlackRock and Fidelity’s Spot Bitcoin ETFs
JPMorgan analysts added that the assets under management of BlackRock and Fidelity’s spot Bitcoin ETFs rose to $1.9 billion and $1.8 billion respectively. According to the analysts, this suggests that these companies’ spot Bitcoin ETFs are emerging as leading competitors against GBTC.
BlackRock’s spot Bitcoin ETF saw an inflow on January 24, increasing its Bitcoin holdings by 1,663 BTC, bringing the total to about 45,700 BTC, which was the lowest level since its launch that day with only $66.2 million. Fidelity’s ETF added 3,170 BTC on January 24, reaching a total of 41,319 BTC.
