According to a report by JPMorgan, a significant number of Grayscale Bitcoin Trust (GBTC) shares were sold at a discount to net asset value (NAV) in 2023. As per the bank, the rise in sales of discounted GBTC is in anticipation that the investment vehicle will convert into a spot Bitcoin (BTC) ETF (Exchange Traded Fund).
According to JPMorgan, GBTC has seen $2.5 billion of inflows since the beginning of the year. Moreover, the bank notes that the amount will increase to $2.7 billion if considering short interest.
As per the analysts, led by Nikolaos Panigirtzoglou, ‘Assuming this buying flow was mostly speculative in anticipation of GBTC being converted to an ETF, then it is likely that this $2.7b would come out of GBTC as these investors take profit once GBTC gets converted.’
Will Bitcoin’s price take a hit?
According to the analysts, if the $2.7 billion exits the market, it could put downward pressure on BTC. However, if the amount goes into other BTC investment vehicles, there will be less pressure on the price. Nonetheless, the bank anticipates some of the $2.7 billion to exit the market. The outflow of funds could negatively impact BTC’s price.
However, other analysts anticipate a bull run for the crypto market in early 2024, fueled by Bitcoin’s (BTC) halving. Moreover, there is a possibility that the SEC (Securities and Exchange Commission) will approve a spot BTC ETF next year. Both developments could push BTC’s price to new heights. Investors have been asking for a spot BTC ETF for a long time. If approved, the asset could see a surge in institutional investments. Institutional interest is one of the biggest drivers for mass adoption.