Grayscale’s Bitcoin ETF is responsible for the drop in Bitcoin price, says JPMorgan

Bitcoin ETF
  • JPMorgan associates Bitcoin’s fall with the performance of the  Grayscale ETF
  • According to estimates, this product will see outputs of USD$3,000 million, of which USD 1,500 million
  • This is because investors capitalized on gains by purchasing shares at a discount before approval.
  • GBTC investors are moving to other, more attractive ETFs, such as BlackRock’s
  • Bitcoin price approaches the barrier of USD$41,000 per unit

During the last few days, the price of Bitcoin has been facing an unexpected drop, which is especially surprising compared to the expectations surrounding what the arrival of a spot Bitcoin ETF on the main US stock exchanges would mean. However, a new report from JPMorgan bank offers some insights into this phenomenon.

Grayscale volumes and the drop in Bitcoin price

According to a recent report published by JPMorgan, reviewed by The Block, the downward pressure that Bitcoin already faces after the arrival of the ETF, motivated by what seemed to be the sell signal for many, could deepen even further. in the midst of the sales that the fund launched by Grayscale (GBTC) has been capitalizing on, which registers the highest volume of operations among all the products that reached the US market last Thursday, January 11.

In relation to this phenomenon, JPMorgan analysts theorize that the ETF launched by Grayscale could see up to USD$3,000 million in exits, of which there are already approximately USD$1,500 million, being funds of users who are capitalizing profits due to having acquired shares. at a discount before the Securities and Exchange Commission (SEC) approves the launch of your product.

In this regard, it reads:

If the above estimate of $3 billion turns out to be correct and given that $1.5 billion has already exited, then there could still be an additional $1.5 billion to exit the Bitcoin space through profit taking on GBTC, which will put more pressure on investors. bitcoin prices in the coming weeks.

In addition to this, JPMorgan analysts also add that Grayscale‘s product is proving very unattractive among the others listed on the main stock exchanges, this because they handle a 1.5% commission for operations, which is too high in contrast. with what the funds of BlackRock, Fidelity and many others offer.

BlackRock ETF is gaining ground

What is stated in the JPMorgan report fits perfectly with other reports published these days, which point out that while the Grayscale ETF is seeing significant capital outflows, the BlackRock product is capturing money flows from new investors.

Currently, the  BlackRock ETF  already has about 25,067  Bitcoin shares, worth just over $1 billion, based on current market prices. This means that the iShares Bitcoin Trust has surpassed 25,000  bitcoins and $1 billion in assets under management (AUM), amid growing interest from traditional market investors. 

In another report published today, the director of  Robinhood’s brokerage area, Steve Quirk, indicated that  BlackRock‘s  Bitcoin ETF qualifies as the most popular among all those traded within the service, being the fund with the highest volume of operations has capitalized within the trading platform.

Meanwhile, the price of Bitcoin registered a quite notable drop today, trading at the time of publication at around USD$41,168 per unit, a figure that represents a drop of 3% in the last 24 hours.