Following the approval of spot Bitcoin exchange-traded funds, the
crypto market witnessed a surprising downturn after FTX unloaded a staggering
$1 billion worth of Grayscale Bitcoin Trust (GBTC) shares.
This unprecedented sell-off, primarily attributed to
FTX’s bankruptcy estate, now raises questions about the broader implications
for the crypto landscape. According to a report by Coindesk, FTX is a significant
contributor to the outflows amounting to more than $2 billion reported by the
Grayscale Bitcoin Trust (GBTC).
CoinDesk‘s data review unveiled that FTX
disposed of 22 million shares, accounting for nearly $1 billion of the overall
outflow. Despite high expectations surrounding the approval of Bitcoin ETFs,
the market witnessed a decline in Bitcoin’s price.
FTX leveraged the price difference between GBTC and
the value of the underlying Bitcoins. Holding 22.3 million GBTC valued at $597
million in October 2023, FTX’s move to liquidate its stake at $900 million
coincided with Grayscale’s Bitcoin ETF launch on January 11. The aftermath saw a drop in Bitcoin’s value,
prompting a reevaluation of the impact of the approval of the ETFs.
Last year, Alameda Research sued Grayscale, seeking to recover $250 million for FTX’s customers and creditors.
This legal tussle involves accusations of exorbitant fees and an alleged
redemption ban by Grayscale.
Alameda Research’s Grievances against Grayscale
FTX asserted that Grayscale violated
trust fund agreements by levying over $1.3 billion in management fees over the
last two years. Additionally, the exchange claimed that Grayscale hindered
shareholders from redeeming their shares, resulting in a significant drop in
the shares of Grayscale Bitcoin and Ethereum Trusts.
However, Grayscale countered these
allegations, labeling the lawsuit “misguided”. According to a report
by Finance Magnates, a spokesperson from Grayscale defended the company’s
efforts to obtain regulatory approval for converting the Grayscale Bitcoin
Trust into an ETF.
Following the approval of spot Bitcoin exchange-traded funds, the
crypto market witnessed a surprising downturn after FTX unloaded a staggering
$1 billion worth of Grayscale Bitcoin Trust (GBTC) shares.
This unprecedented sell-off, primarily attributed to
FTX’s bankruptcy estate, now raises questions about the broader implications
for the crypto landscape. According to a report by Coindesk, FTX is a significant
contributor to the outflows amounting to more than $2 billion reported by the
Grayscale Bitcoin Trust (GBTC).
CoinDesk‘s data review unveiled that FTX
disposed of 22 million shares, accounting for nearly $1 billion of the overall
outflow. Despite high expectations surrounding the approval of Bitcoin ETFs,
the market witnessed a decline in Bitcoin’s price.
FTX leveraged the price difference between GBTC and
the value of the underlying Bitcoins. Holding 22.3 million GBTC valued at $597
million in October 2023, FTX’s move to liquidate its stake at $900 million
coincided with Grayscale’s Bitcoin ETF launch on January 11. The aftermath saw a drop in Bitcoin’s value,
prompting a reevaluation of the impact of the approval of the ETFs.
Last year, Alameda Research sued Grayscale, seeking to recover $250 million for FTX’s customers and creditors.
This legal tussle involves accusations of exorbitant fees and an alleged
redemption ban by Grayscale.
Alameda Research’s Grievances against Grayscale
FTX asserted that Grayscale violated
trust fund agreements by levying over $1.3 billion in management fees over the
last two years. Additionally, the exchange claimed that Grayscale hindered
shareholders from redeeming their shares, resulting in a significant drop in
the shares of Grayscale Bitcoin and Ethereum Trusts.
However, Grayscale countered these
allegations, labeling the lawsuit “misguided”. According to a report
by Finance Magnates, a spokesperson from Grayscale defended the company’s
efforts to obtain regulatory approval for converting the Grayscale Bitcoin
Trust into an ETF.
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- Source: https://www.financemagnates.com//cryptocurrency/ftxs-1-billion-sell-off-prompts-outflows-from-grayscale-bitcoin-trust-report/
