FTX sells $1B in GBTC, ownership hits zero amid $2B ETF outflows

  • Following regulatory approval, FTX has initiated a significant sell-off, offloading approximately $1 billion worth of Grayscale Bitcoin ETF shares.
  • Amidst the conversion surge into an exchange-traded fund (ETF), Grayscale’s Bitcoin ETF witnesses substantial outflows, totaling $2 billion.
  • In a landmark decision, the US Securities and Exchange Commission (SEC) greenlights 11 Bitcoin ETFs, signaling a pivotal moment in the mainstream acceptance of cryptocurrency investments.

FTX has undertaken a substantial sell-off, offloading approximately $1 billion worth of shares in the Grayscale Bitcoin Trust (GBTC) within just a month of its recent conversion into an exchange-traded fund (ETF).

This strategic move has swiftly depleted FTX’s GBTC ownership, bringing it down to zero, as revealed by a report from CoinDesk on Monday (Jan 22).

The ripple effect of FTX’s sell-off

The conversion of GBTC into an ETF has triggered notable market dynamics, with the trust experiencing outflows surpassing $2 billion, according to insights derived from private data scrutinized by CoinDesk and corroborated by two reliable sources. This shift in ownership dynamics sheds light on the evolving landscape of cryptocurrency investments and the growing acceptance of digital assets within traditional financial markets.

The Grayscale Bitcoin Trust, now holding the title of the world’s largest bitcoin ETF with assets exceeding $28.6 billion under management, received a green light from the US Securities and Exchange Commission (SEC) for the conversion of its existing bitcoin trust. This SEC approval is a landmark decision and follows a decade-long struggle between the regulatory body and the digital asset industry.

Also read: BlackRock’s bitcoin ETF hits $1B in 4 days

The SEC’s stamp of approval

The SEC’s decision to approve 11 spot bitcoin ETFs, including those from BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF, marks a watershed moment in the journey towards mainstream acceptance of cryptocurrencies. This regulatory endorsement enhances the legitimacy of the entire cryptocurrency industry, pushing Bitcoin further into the mainstream as a recognized and regulated investment.

A spokesperson from Grayscale commented on the unfolding developments, stating, “Large capital markets ETFs are used in a variety of investing strategies, and we anticipate GBTC’s diverse shareholder base will continue to deploy strategies that impact inflows and outflows.” This insight into investor behavior highlights the multifaceted nature of large capital market ETFs and the strategic decisions being made within the cryptocurrency space.

As FTX’s sell-off sets a precedent, the market watches closely to understand the broader implications for cryptocurrency investments and the potential influence on other major players in the digital asset arena. The shifting dynamics underscore the need for investors to adapt to the evolving landscape of cryptocurrency markets, where traditional financial strategies intersect with the dynamic nature of blockchain-based assets.

Also read: Unlocking bitcoin: A game-changing move in ETF fees


Elma Yuan

Elma Yuan was a junior reporter at BTW media interested in media and communication.

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