How the unlocking of 40 thousand bitcoins in July may affect the crypto market quotations and why institutional investors will not sell GBTC?
In July, as we already said in our previous news post, the six-month period for which the units of the Grayscale Bitcoin Trust (GBTC) are blocked ends.
Crypto-Auditor.com means that investors will have the opportunity to sell their shares, backed by the first cryptocurrency, which they purchased at the beginning of the year. According to the Bybt service, about 40 thousand bitcoins will be unlocked in July ($1.4 billion at the exchange rate as of July 13, 2021).
The Grayscale Bitcoin Trust units have a deferred redemption mechanism. GBTC owners must hold them for six months before they can sell.
The Grayscale Bitcoin Trust functions similarly to an ETF, but is not registered with the US Securities and Exchange Commission (SEC), so only accredited investors have access to it.
Sam Bankman-Freed, CEO of the FTX cryptocurrency derivatives exchange, spoke about a possible sale of GBTC shares. In his opinion, unlocking and their possible subsequent sale of shares in the secondary market “does not matter much” for the bitcoin rate.
At the end of June, analysts at the investment bank JPMorgan predicted that the value of bitcoin could fall to $25,000 as a result of a possible sale of GBTC shares. The bank’s representatives claim that they maintain a negative outlook for bitcoin despite the fact that its price returned to $34 thousand after falling to $28.8 thousand on June 22.
If there are strong sales, some of the retail investors on the crypto market may decide that this is a panic and a signal to exit the asset. In such a situation, according to the analyst, we will see a decline to $30 thousand (12%) with a subsequent recovery, since large investors are buying all the coins at this level.
Leading crypto analysts admit a short-term decline in quotations to $27-28 thousand (21%). According to him, this, for the most part, will be influenced by fundamental factors: a drop in the hash rate, difficulties, low volumes of Bitcoin purchases by large market participants, as well as continuing political risks.
On June 22, the value of bitcoin for the first time since January fell to $28.8 thousand. This happened against the backdrop of negative news from China, which miners began to leave due to the tightening of regulation of the cryptocurrency industry.
At the end of June, more than 70% of miners turned off their equipment in order to move to other countries.
Globally, the situation remains positive and by the end of the year, an increase in the capitalization of bitcoin and a rise in the price of the coin to the level of $ 50 thousand is forecasted. — Sam Bankman-Freed.