As Bitcoin struggles around the $30,000-$32,000 range after a huge price drop in May, another major bearish event looms over Bitcoin and could be the big catalyst that tanks it below the $30K support.
A total of nearly 41,000 BTC will be unlocked in July, amounting to nearly $1.4 billion in notional value. The biggest of these unlocks will be on July 18th when 16,240 BTC will be available due to the release of the six-month lock-in period for GBTC shares.
While many Bitcoin promoters are trying to keep this news hush-hush, this is something everyone should be aware of. Hence, why I’m writing about it.
What Is The GBTC Unlock?
Grayscale Bitcoin Trust is the largest traded crypto fund in the world, owned by leading crypto asset manager Grayscale Investments, LLC. They currently hold
654,600 BTC tokens worth more than $21.56 billion. This amounts to 3.11% of Bitcoin’s maximum supply of 21 million tokens.
Accredited investors can buy shares of the fund directly and then sell them after a six-month lockup on a secondary market under the ticker GBTC.
The GBTC fund became popular among investors because it was the only public market vehicle available for trading BTC and was considered the next best thing to a Bitcoin Exchange-Traded Fund (ETF), especially since US regulators are unlikely to approve such a product despite multiple applications.
Due to the lack of alternatives, GBTC shares are often traded at a premium to the value of bitcoin on spot markets. However, the tables have turned in recent months and GBTC shares have started trading at a significant discount, prompting Grayscale, Bitcoin’s largest buyer, to stop buying more BTC.
Institutional Demand Plunging
One of the biggest misconceptions in crypto is that institutional investors are interested in purchasing Bitcoin. These are totally false rumors spread by moon boys and Bitcoin maxi’s in an attempt to create hype.
Just last week, we saw Bitcoin bulls expressing their euphoria and hype over a false rumor that claimed “Apple would be purchasing billions in Bitcoin”
We’ve seen these fake rumors started with Facebook, Google, Amazon, and dozens of top companies. They even claimed Paraguay and Mexico accepted Bitcoin as legal tender to advanced a false narrative that Latin America is slowly moving to adopt Bitcoin. These rumors are aimed at 1 thing, to create an illusion of value, and lure in inexperienced retail to later dump on.
In the chart below, we can see Grayscale hasn’t increased its Bitcoin holdings in several months, which suggests little to no new institutional demand.