Bitcoin’s price has certainly been stuck in a rut for a while now. News out of China and continued FUD from their government has seen the price drop to around half its recent all-time high. There is still good news around, but it is not having the same pull.
But with another bout of bad news seemingly on the way for Bitcoin traders, things may not be all that worrying. In fact, there is even evidence that the price of the major cryptocurrency could jump following the unlocking of 16,000 BTC by Grayscale in the coming days.
“While many market participants have been bearish due to the upcoming unlocking of over 16,000 BTC by Grayscale on July 18, I personally do not see it impacting the market other than trader’s paranoia over it,” says Prime BT analyst Kim Chua.
The price of BTC has been suppressed by short positions as well as by FUD over this unlocking event. Note that unlocking the BTC held at GBTC may not necessarily equate to GBTC having to sell off this BTC. The unlocked BTC could be transferred within GBTC to other new buyers of GBTC for around the same period. Grayscale need not have to dispose of any BTC for investors unlocking if they have enough new buyers to take over.
All Grayscale needs to do is transfer ownership of the BTC from old shareholders to new shareholders without having to touch any BTC at all. Lately, we have also been seeing more purchases of GBTC shares, with the latest high-profile investor being Ark Investments. This goes to show that institutional interest in GBTC is coming back and may well easily absorb that 16,240 BTC, which isn’t an exceedingly large number anyway.
Hence, I find it strange that the market is so concerned about this event. All I can think of is that this is merely a FUD created by people to suppress the price of BTC in order to buy more at a lower price. From my observation, much of the BTC selling has been well-absorbed by long-term whales who have no history of selling and are in very strong hands.
When this GBTC FUD ends, we could see the price of BTC spike upwards after people waiting on the sidelines for another dip to buy find no dip and will have to start buying at a higher price.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns over seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.
