JPMorgan Analysts Predict GBTC Sell-Off to Ease Pressure on Bitcoin Prices
The big wave of profit-taking from Grayscale’s Bitcoin Trust (GBTC) is winding down, claims JPMorgan, and this might be relieving for Bitcoin’s value. Since the trust converted to an ETF on January 11, it has seen about $4.3 billion in outflows. This sell-off, which has been ongoing, is a major source of downward pressure on Bitcoin. However, with much of the profit-taking now complete, the pressure from this source could be easing up, according to the bank.
The Impact of GBTC Profit-Taking: What it Means for You
JPMorgan analysts note that the launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. has resulted in a more than 20% drop in Bitcoin’s price, which is now hovering at around $40K. Buyers who purchased GBTC at a discount have been reaping profits, which has contributed to the drop. However, Grayscale’s ETF saw $429 million in outflows on the same day, but this dropped to $394 million on January 25.
Billion-Record Outflows and the Market
Additionally, the banking giant says that BlackRock and Fidelity, two newcomers offering spot Bitcoin ETFs, are now competitors for GBTC. BlackRock’s ETF had $1.9 billion invested, and Fidelity’s had $1.8 billion. The amount of money coming into these ETFs has been fluctuating, suddenly dropping down to $66.2 million for BlackRock’s ETF.
Hot Take
JPMorgan predicts that the wave of people cashing out profits from GBTC is tapering off, which could bring some ease to the pressure on Bitcoin’s price. The impact of profit-taking which is easing up, and this could have a positive effect on Bitcoin’s value in the near future.
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