Bankrupt FTX Dumps $1 Billion GBTC, Causes Massive BTC Price Dip – Coinpedia Fintech News


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FTX, despite bankruptcy, sold all its GBTC shares after their conversion to ETFs.
While new Bitcoin ETFs attract inflows, GBTC experiences outflow, partly due to FTX’s sale.
Bitcoin price falls after ETF approval, contrary to optimistic expectations.
In a surprising twist, FTX, currently navigating Chapter 11 Bankruptcy, has successfully sold around $1 billion worth of Grayscale Bitcoin Trust (GBTC) shares following their conversion into exchange-traded funds (ETFs). This move, occurring after FTX filed for Chapter 11 on November 11, 2022, is causing a stir in the cryptocurrency space.
Recently, FTX executed the sale of a substantial 22 million GBTC shares, converted into Bitcoin ETFs on January 11. This strategic move has wiped out FTX’s stake in GBTC entirely. Before the sell-off, FTX held a significant 22.3 million GBTC shares valued at $597 million as of October 25, 2023.
The conversion of Grayscale Bitcoin Trust into an ETF marked a significant milestone, coinciding with the SEC’s approval of multiple new Bitcoin ETFs. While issuers like Grayscale and Fidelity are witnessing substantial inflows into their Bitcoin ETFs, GBTC is experiencing considerable outflows, with FTX’s massive sell-off playing a substantial role.
Also Read: Is Grayscale “Dumping” Bitcoin on the Market? Here’s the Truth
FTX’s cryptocurrency holdings extend beyond GBTC, encompassing shares in five Grayscale trusts and nearly 3 million shares in a statutory trust managed by ETF provider Bitwise.
Previously held in a brokerage account at ED&F Man Capital Markets (now Marex Capital Markets Inc.), these holdings are under scrutiny. Both Marex and Galaxy Digital, associated with these holdings, have opted not to disclose details regarding these developments.
On the other hand, Alameda Research, the sister firm of FTX, has voluntarily dismissed the lawsuit against Grayscale alleging that the latter had charged excessive fees. 
Contrary to optimistic expectations, data indicates that the price of Bitcoin has experienced a significant decline post the ETF approval frenzy. Analysts anticipated a bullish surge, envisioning Bitcoin ETFs as a user-friendly gateway for general investors to enter the cryptocurrency market.
Read More: Bitcoin Price Tumbles 20% After ETF Hype: Is This a Good Time to Buy?
With FTX completing the sale of its substantial GBTC holdings, speculation arises that the selling pressure on GBTC may ease. The unique scenario of a bankruptcy estate liquidating such holdings could be a contributing factor to recent outflows.

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