CEO of crypto derivates exchange FXT, Sam Bankman-Fried, doesn’t agree with opinions about the impact of the upcoming Grayscale Bitcoin Trust (GBTC) unlock.
Approximately 40,000 BTC worth over $1.32 billion will be unlocked from the Grayscale Bitcoin Trust this month, and analysts at JP Morgan have predicted that it could be a bearish catalyst since it gives holders a chance to sell their shares.
Investors who buy GBTC shares have to wait for a six-month lock-in period before they can sell their holdings.
Celsius Network CEO Alex Mashinsky also predicts funds that want to capture price differences in the market (arbitrage opportunities) will short Bitcoin and purchase GBTC shares at a high discount. According to Mashinsky, the net result is $5 billion worth of sell pressure, which could well drive Bitcoin below $30,000.
Bankman-Fried doesn’t agree. He tweeted to his 217K followers on Twitter that the unlocked GBTC shares likely won’t have an impact on Bitcoin’s price.
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
“Remember: most GBTC creators are doing arbs; most people getting long are buying in markets.So the unlock probably doesn’t really matter for BTC. If people sell GBTC, most will buy BTC against it (not investment advice, who knows, anything could happen).”
Prominent bitcoin on-chain analyst Willy Woo agrees with Sam Bankman-Fried. His prediction is that the long-term impact of the GBTC shares unlock is neutral. He says the arbitrage opportunities presented by the unlock tend to balance out over time as the expected plummet in the value of GBTC shares incentivizes investors to buy at a discount.
1) Derivatives
Playing the carry trade: a) buy BTC spot, put it into Grayscale b) receive GBTC shares c) short BTC futures (to hedge risk) d) earn yield from shorting BTC e) earn the GBTC premium
Unlocking: f) sell GBTC shares for USD g) unhedge shorts
The on-chain analyst also clears the confusion surrounding the coins involved in GBTC unlock. He notes that no BTC ever leaves the Grayscale Bitcoin Trust once it’s there.
“Grayscale is a unique product. It’s designed as a black hole that sucks in BTC. No BTC ever leaves the trust. Apart from Grayscale taking its 2% management fees from the holdings, this is the only way to reduce the GBTC inventory.”
