The company Grayscale, which manages several cryptocurrency funds, will dump more than 16 thousand bitcoins on the market in mid-July. JPMorgan sees this as a bearish signal.
Digital asset manager Grayscale Investments allows institutional investors to access bitcoin through shares of the Grayscale Bitcoin Trust (GBTC) without actually owning the underlying cryptocurrency.
GBTC currently owns 654.6 thousand bitcoins (more than 3% of the cryptocurrency issue), writes hashtelegraph. Investors can buy GBTC shares, but they are only allowed to sell them during the unlock period.
On July 19, Grayscale Investments will unlock 16.24 thousand bitcoins, and investors of the GBTC fund will get a chance to sell them, which could lead to a further drop in bitcoin, JPMorgan is sure.
The share price rarely matches the market price of bitcoin and is usually traded at a premium. Currently, this premium has a negative value and is equal to -8.8%. This indicates a reduced institutional demand.
Well-known analyst Willie Wu disagrees with JPMorgan’s assessment. He noted that unblocking GBTC will have both bearish and bullish effects, and the whole point is which one is stronger.
According to Wu, the unblocking result will be “immediately bullish”, as institutional investors will have the right not only to sell their assets, but also to reinvest them in GBTC. Given the negative premium, this would mean buying bitcoins at a discount relative to the market price.
Meanwhile, cryptocurrency investment products saw their first net inflow in five weeks, CoinShares said in a new report.
Crypto whales are again building up their bitcoin assets, after getting rid of them along with the depreciation over the previous months, according to the research platform Glassnode.
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