Just In: FTX’s Bankruptcy Estate Sold 22 Million GBTC Shares, Leading to $1 Billion GBTC Outflow

cryptonews.com:

The ongoing bankruptcy proceedings for crypto exchange FTX have led to major sell-offs from one of the largest bitcoin funds. According to a recent CoinDesk report, FTX’s bankruptcy estate sold 22 million shares in the Grayscale Bitcoin Trust (GBTC) fund, amounting to around $1 billion in outflows.

This revelation helps explain the declines seen in GBTC since its conversion to a spot Bitcoin ETF on January 11, as well as the overall crypto market declines since the SEC approved spot Bitcoin ETFs.  While new entrants like BlackRock have seen inflows, GBTC has bled over $2 billion as its discount to net asset value widened. Data indicates much of this stems from FTX exiting its position.

According to a November 2023 filing, The firm held 22.3 million shares worth nearly $600 million since October 2023. This stake surged above $900 million after the long-awaited Bitcoin ETF approval lifted GBTC’s share price.

FTX estate prioritized raising cash by unwinding the crypto exchange’s investments, including its GBTC holdings. As one of the largest shareholders of GBTC, FTX had benefited from the long-standing premium between the trust’s share price and its underlying BTC holdings. This disparity evaporated once GBTC converted to an ETF structure.

Looking at the heatmap Im calling The Big Squeeze.

– @FTX_Official has sold out of $GBTC and $BTC and this will hit the media circuit.
– @binance is in court and their case may be thrown out by end of day, their Royal Flush is complete and leverage longs entered during the ETF… pic.twitter.com/WymX4jmIep

— MartyParty (@martypartymusic) January 22, 2024

With GBTC no longer trading at a premium, FTX’s bankruptcy estate moved quickly to exit its position. The $1 billion sale represented nearly