FTX CEO Sam Bankman-Fried is the latest major Bitcoin figure to speak out about how the GBTC unblocking will affect Bitcoin.
The CEO of FTX Predicts How the Unblocking of GBTC Will Affect Bitcoin
The sale of Grayscale Bitcoin Trust (GBTC) shares on the secondary market, according to FTX CEO Sam Bankman-Fried, “doesn’t matter” for Bitcoin. Bankman-Fried predicts that there will be next enormous pressure in crypto markets, but he does not rule out the possibility of “anything” happening.
remember: most GBTC creators are doing arbs; most people getting long are buying in markets.
so the unlock prob doesn't really matter for BTC, if people sell GBTC most will buy BTC against it. https://t.co/w8Stpht4Jf
— SBF (@SBF_Alameda) July 12, 2021
Grayscale Bitcoin Trust features a delayed redemption mechanism, which requires GBTC founders to keep their shares for six months before selling them. They set the January sweep of GBTC shares to become available in July.
According to Bitcoin data aggregator Bybt, on July 18 alone, 16,240 BTC ($560 million at press time) will issue. This month, 40,000 BTC ($1.4 billion) is to be released.
Narratives That Are Both Bearish and Positive
It split cryptocurrency professionals and analysts on whether the unlocking will harm the Bitcoin price.
Last month, JP Morgan researcher Nikolaos Panigirtzoglou issued a pessimistic forecast, saying that the entry of GBTC shares into the cryptocurrency market would be an “additional headwind” for the flagship coin:
“Selling of GBTC shares after the six-month lockup period has surfaced as an additional barrier for Bitcoin in June and July.”
The Kraken Intelligence research team does not believe the $560 million unlock will have a “material” impact on the cryptocurrency market:
“Despite the unlocking of 40K BTC worth of GBTC shares in July, market structure implies that the unlock will not have a major impact on BTC spot markets soon, if at all, as some have suggested.”
Meanwhile, Amber Group, a crypto-financial services business, forecasted that institutional investors who borrowed Bitcoin in early 2021 to take advantage of the trust’s high premium will now have to purchase back coins in spot markets to pay back liabilities.
Lots of bearish chatter around GBTC unlocks whilst conveniently ignoring that in-kind subscriptions funded by debt will ultimately translate into spot buying.
— Amber Group (@ambergroup_io) July 2, 2021
Since early May, GBTC shares have been trading at a discount to net asset value (NAV), owing to a combination whammy of increasing competition and diminishing institutional investor interest in Bitcoin.