Bitcoin price has certainly been stuck for a while now. News from China and continuation of its government’s FUD saw the price drop to about half of its all-time high. There’s still good news out there, but it’s not having the same appeal.
However, with another bout of bad news seemingly on the way for Bitcoin investors, things may not be as worrisome. In fact, there is even evidence that the price of the main cryptocurrency could jump after unlocking 16,000 BTC at Grayscale in the coming days.
While many market participants are pessimistic about Grayscale unlocking more than 16,000 BTC on July 18, I personally don’t see it impacting the market beyond trader paranoia about it, said Kim Chua, analyst at PrimeXBT.
BTC price was suppressed by short positions and also by FUD during this unlocking event. Please note that the unlocking of the BTC performed at the GBTC may not necessarily mean that the GBTC has to sell this BTC. The unlocked BTC could be transferred within the GBTC to other new GBTC buyers in the same period. Grayscale doesn’t need to drop any BTCs to unlock investors if they have enough new buyers to take over.
All Grayscale needs to do is transfer ownership of the BTC from the old shareholders to the new shareholders, without having to touch any BTC. Lately, we’ve also seen more purchases of GBTC shares, with the latest high profile investor being Ark Investments. This shows that institutional interest in GBTC is returning and may well absorb that 16,240 BTC, which is not an excessively large number anyway.
So I find it strange that the market is so concerned about this event. All I can think of is that this is merely FUD created by people to suppress the BTC price in order to buy more at a lower price. From my observation, a large part of BTC sales has been well absorbed by long-time whales that have no sales history and have very strong hands.
When this GBTC FUD ends, we may see the price of the BTC rise quickly after people waiting for another dip to buy do not find any fall and will have to start buying at a higher price.
About Kim Chua, Market Analyst at PrimeXBT:
Kim Chua is an institutional trading specialist with a successful track record that spans major banks including Deutsche Bank, China Merchants Bank and others. Over time, Chua launched a hedge fund that consistently delivered triple-digit returns for seven years.
Chua is also an educator at heart who developed her own trading curriculum to pass her knowledge on to a new generation of analysts.
Kim Chua closely follows the traditional and cryptocurrency markets and is eager to find future investment and trading opportunities as the two very different asset classes begin to converge.