Since the launch of multiple spot Bitcoin exchange-traded funds (ETFs) this month, BTC has been experiencing a downward trajectory, leaving investors on edge. Adding to this struggle is the potential liquidation of $25 billion in Grayscale Bitcoin Trust (GBTC).
While some analysts fear that the pending liquidation will further drag down the price of BTC, others, like Galaxy Digital CEO Mike Novogratz, see a silver lining.
Over the weekend, crypto analyst Chris J. Terry posted on X (Twitter) that before the liquidation of $25 billion in GBTC is completed, the price of BTC will continue to remain flat or fall. Further, he criticized Grayscale’s decision to maintain its 1.5% management fee, calling it “the biggest strategic error in crypto history.”
Novogratz: Bitcoin Will Survive GBTC Indigestion
However, Novogratz offered a counterpoint to Terry’s analysis. While acknowledging that some GBTC selling might occur, Novogratz stated that most investors will switch to other spot Bitcoin ETFs such as BTCO – which Galaxy Digital offers.
I disagree with this. While I think people will sell GBTC, I think most will switch into other ETFs – $BTCO being my favorite !!
Let’s not miss the forest through the trees. It’s now gonna be far easier for boomers to buy corn. And you can get 4×5 times leverage on this… https://t.co/ZJhumt3tzx
— Mike Novogratz (@novogratz) January 21, 2024
The American investor sees the liquidation as an opportunity to broaden Bitcoin’s appeal, especially among baby boomers, as other ETFs offer easier access and higher leverage.
“Let’s not miss the forest through the trees. It’s now gonna be far easier for boomers to buy corn. And you can get 4×5 times leverage on this $BTC exposure,” he said.
In conclusion, Novogratz expressed confidence that BTC will be higher in six months once the initial GBTC selling pressure subsides.
At press time, BTC was trading at $40,458, representing a 3% decline in the last 24 hours and a 7% drop over the past two weeks.
GBTC Struggles
While its competitors have been seeing early success since their launch earlier this month, Grayscale’s GBTC has continued to struggle – primarily driven by its high management fee.
For instance, within its first four days of trading, GBTC saw $1.62 billion in outflows. In contrast, BlackRock’s IBIT and Fidelity’s FBTC crossed $1 billion and $874 million in assets under management (AUM), respectively.
