Key takeaways:
- FTX’s bankruptcy estate has sold a substantial 22 million shares, valued at nearly $1 billion, from GBTC
- Spot bitcoin ETFs finally started trading on January 11 after receiving approval from the U.S. SEC.
In a recent development, defunct cryptocurrency exchange FTX has reportedly offloaded nearly $1 billion worth of shares in Grayscale’s GBTC fund since the launch of the firm’s instrument as a spot bitcoin ETF.
According to CoinDesk, which cited “private data” and anonymous sources, FTX took advantage of price disparities between Grayscale trust shares and the net asset value of underlying bitcoin.
Spot bitcoin ETFs started trading on January 11 after years of delays, following approval by the U.S. Securities and Exchange Commission (SEC). However, Grayscale’s fund had been in existence for a decade, initially structured as a less-attractive closed-end fund. Upon SEC approval, the fund converted to an ETF, accompanied by the approval of 10 newly created bitcoin ETFs.
FTX’s bankruptcy estate, approved in November, aimed to recover around $873 million in assets by selling over 22 million GBTC units. These assets included FTX’s stakes in Grayscale Investments and Bitwise, valued at $807 million and $66 million, respectively. FTX initially held 22.3 million GBTC shares valued at $597 million, and the value rose to around $900 million with the launch of Grayscale’s bitcoin ETF on January 11.
The data reviewed by CoinDesk indicates that FTX accounted for a significant portion of the shares sold, amounting to close to $1 billion. FTX’s bankruptcy estate, approved in November, aimed to recover around $873 million in assets by selling over 22 million GBTC units.
Bitcoin’s price has experienced a decline since the approval of ETFs, contrary to the high expectations held before the SEC’s decision. Bitcoin ETFs were anticipated to provide an easier way for the general public to invest in bitcoin, leading to optimistic forecasts for BTC’s price. The situation underscores the complex dynamics at play in the evolving landscape of cryptocurrency investments.
FTX, among numerous prominent crypto trading entities, strategically exploited price differences between Grayscale trust shares and the net asset value of underlying bitcoin. Initially holding 22.3 million GBTC shares valued at $597 million, FTX’s assets surged to approximately $900 million following the debut of Grayscale’s bitcoin ETF on January 11.
As part of its approved bankruptcy estate in late November, FTX plans to liquidate over 22 million GBTC units to recover about $873 million in assets. This includes FTX’s stakes in Grayscale Investments and Bitwise, valued at $807 million (as per previous assessments) and $66 million, respectively.
