The flagship cryptocurrency, bitcoin, recently fell below $40,000. This continues on bitcoin/bitcoin-price-fall-below-41000/#:~:text=A%20sell%20pressure%20of%20such,pressure%20was%20pushing%20prices%20down.” rel=”nofollow noopener” target=”_blank”>The decline of the crypto tokenwhich began around the time bitcoin Spot ETFs Approved. Interestingly, a recent development indicates that the defunct FTX crypto exchange has largely contributed to this price drop.
Why bitcoin fell below $40,000
According to a Bloomberg bitcoin-trust-holdings-gbtc?utm_source=twitter&utm_medium=social&utm_campaign=socialflow-organic&utm_content=crypto” rel=”nofollow noopener” target=”_blank”>reportFTX sold the majority of its shares in Grayecale bitcoin Trust (GBTC) after bitcoin ETF conversion. This means that it has contributed in part to Grayscale's endless btc sales in an attempt to meet these swaps. The grayscale movement in the market is believed to be the reason why the price of bitcoin has continued to fall.
NewsBTC had bitcoin/bitcoin-price-fall-below-41000/#:~:text=A%20sell%20pressure%20of%20such,pressure%20was%20pushing%20prices%20down.” rel=”nofollow noopener” target=”_blank”>previously reported how GBTC experienced outflows of over $2 billion in just five days after it began trading as a bitcoin Spot ETF. Now, this trend appears to have been led by FTX as a sale of all of its GBTC holdings. amounts to almost a billion dollarsaccording to recent reports.
Like any other GBTC investor, FTX is believed to have been making profits, considering the fund was trading at a price btc discount right up to the bitcoin ETF conversion. Furthermore, FTX would have liquidated its GBTC holdings sooner rather than later, considering that it is in the process of paying all your clients.
FTX's sister company, Alameda Research, has also been busy in the market lately, possibly in an attempt to also contribute to FTX's payment plan. NewsBTC crypto/crypto-ftx-celsius-matic-eth-wbtc/#:~:text=On%2Dchain%20data%20shows%20that,and%201150%20ETH%20to%20Wintermute.” rel=”nofollow noopener” target=”_blank”>had informed that the trading firm transferred significant portions of its cryptocurrency holdings to Binance, suggesting an imminent sell-off was looming.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/01/Here39s-why-Bitcoin-price-fell-below-40000" alt="Tradingview.com bitcoin Price Chart” width=”3266″ height=”1530″/>
btc price falls below $40,000 | Source: BTCUSD on Tradingview.com
Things could still get worse
James Seyffart, Bloomberg analyst recently revealed that capital outflows from Grayscale's GBTC do not appear to be slowing. GBTC is said to have recorded over $640 million in outflows on January 22. This figure represents its largest single-day outflow, with a total of $3.45 billion out of the fund so far.
If this trend continues, it could have an even more negative impact on bitcoin/bitcoin-to-reach-1-million/#:~:text=bitcoin‘s%20Rise%20To%20%241%20Million%20To%20Happen%20%E2%80%9CIn%20Days%20To%20Weeks%E2%80%9D&text=The%20analyst’s%20bullish%20prediction%20for,traders%20to%20experience%20maximum%20loss.” rel=”nofollow noopener” target=”_blank”>btc price as Grayscale will have no choice but to continue dumping its btc holdings into the market. Since GBTC began trading as a Spot bitcoin ETF, the asset manager has deposited over 63,900 btc in Coinbase and you have probably already dumped all of these tokens on the market.
Grayscale still has more than $21 billion assets under management (Aum) and a btc holding of over 573,000, meaning that selling pressure of such magnitude could be truly disastrous for bitcoin and the broader crypto market.
At the time of writing, bitcoin was trading at around $39,700, down more than 3% in the last 24 hours, according to bitcoin/” rel=”nofollow noopener” target=”_blank”>data from CoinMarketCap.
Featured image from Nairametrics, chart from Tradingview.com
