Bitcoin - End of the tunnel in sight?

It appears that the bearish pressure associated with the GBTC ETF is fading somewhat. Are we glimpsing the resumption of the Bull Run for Bitcoin?

The shadow of Grayscale still looms over Bitcoin

In total, 118,000 Bitcoins have been absorbed by the nine ETFs approved by the SEC last January 10.

However, the bullish impact is non-existent due to the Grayscale ETF, which parallelly sold 96,000 Bitcoins. Its clients are not satisfied with its near eight times higher management fees compared to its competitors.

To put these numbers in perspective, note that only 13,500 Bitcoins have been mined during the same period. BlackRock has already absorbed in just eight days the equivalent of the miners’ monthly harvest.

Given that this harvest will be halved in April due to the halving. We will drop from 27,000 BTC mined each month to 13,500.

This Thursday, January 25, 10,871 Bitcoins left the GBTC ETF. That’s a drop of 15% over the past seven days for the ETF, which still contains over 510,000 Bitcoins…

As we have previously explained, it is likely that this exodus will continue for a while. Indeed, 87% of the Bitcoins would have to be withdrawn for Grayscale to no longer find it financially viable.

In other words, it’s not impossible that the outflow continues for an additional 40 working days. That is eight weeks of bearish pressure.

Nevertheless, it seems that things are settling down. Here are the outflows from the GBTC ETF:

$GBTC #BTC Daily Outflows 📉 pic.twitter.com/q3UNqWWMHz

— EingeL 📈  (@EingeLtrade) January 25, 2024

“Only” $394 million left the GBTC ETF this Thursday. That said, inflows into the other ETFs have also slowed.

We’re falling back to leap further. The demand shock will eventually come, sooner or later. Clients who have left Grayscale are simply waiting for the market to start recovering to make their rotation to the new ETFs.

The Return of FUD

FUD makes a comeback with on one hand the old chestnut Mt. Gox, and on the other hand the US government’s sale of Bitcoins amounting to $130 million.

This is a portion of the Bitcoins seized in the “silk road” case. These $130 million are just a drop in the ocean, but let’s not forget that in total 144,000 Bitcoins were seized, amounting to the equivalent of $5.6 billion.

Let’s also not forget that the US government currently holds a total of 215,000 Bitcoins:

We're currently tracking 100 entities, including:

– 43 public companies
– 14 private companies
– 33 ETFs/funds
– 8 government entities
– Wrapped BTC on Ethereum

Note: data is community-sourced and may be inaccurate. Help us by contributing on https://t.co/7lHaYqHtbz! pic.twitter.com/vMvykrawZL

— BitcoinTreasuries.NET (@BTCtreasuries) January 18, 2024

However, let’s wager that the United States knows full well that it would be a grave mistake to sell all those Bitcoins.

Regarding Mt. Gox, some customers reported receiving payments in yen to their PayPal accounts last December.

Concerns resurfaced very recently following an email from the Japanese authorities suggesting an acceleration of repayments. When, at what pace? It’s not very clear.

But we are talking about 142,000 Bitcoins, 143,000 BCH and the equivalent of 467 million dollars in yen that should finally be returned to their rightful owners.

Will these 142,000 Bitcoins be sold off immediately? Probably not. Mt. Gox clients have had ten years to accumulate more Bitcoin… Therefore, it’s not out of the question that this repayment to all these OGs might only be seen as a small bonus in their eyes.

In the short term, all eyes are on the GBTC ETF. The stabilization of Bitcoin outflows at a low level will signal the return of the bull run. Just a little more patience. Hodl!