Will the judge's approval for FTX creditors to sell six funds including GBTC cause selling pressure on Bitcoin?

According to The Block's report, a bankruptcy court in Delaware has approved FTX debtors to sell $744 million worth of Grayscale and Bitwise funds. Will this FTX sell-off create selling pressure on GBTC and even the Bitcoin market?

Judge Approves Sale of Six Funds

Judge John Dorsey has approved a motion submitted by FTX debtor in early November seeking the judge's permission to begin the sale of the following six funds, with a total value of approximately $7.44 billion:

• Grayscale Bitcoin Trust GBTC: Approximately 22.3 million shares, valued at $597 million, currently valued at $780 million
• Grayscale Ethereum Trust: Approximately 6.3 million shares, valued at $87 million
• Grayscale Ethereum Classic Trust
• Grayscale Litecoin Trust
• Grayscale Digital Large Cap Trust
• Bitwise 10 Crypto Index Fund

Will there be selling pressure on GBTC?

Recent community expectations for a Bitcoin spot ETF and the continuous rise in Bitcoin prices have led to a significant reduction in the discount of Grayscale's flagship fund, GBTC. Ark Invest, which has always been bullish on Bitcoin, has been selling GBTC since August to maintain the fund's weight, totaling 1.29 million shares sold. At an average price of $25, this amounts to approximately $32.25 million of GBTC sold.

Ark Invest selling GBTC to bearish on Bitcoin? Bloomberg analysts: to maintain fund weight

However, compared to FTX's 22.3 million shares, this seems insignificant! Will this wave of FTX selling create selling pressure on GBTC or even the Bitcoin market?

According to data from Grayscale's website, GBTC currently has 692 million shares outstanding with an asset value of $23.3 billion. FTX holds 3.22% of its total shares, accounting for 0.1% of the Bitcoin market value of $738.8 billion. If FTX can sell in batches or through over-the-counter trading, it should not be enough to affect GBTC or the Bitcoin spot market.

Looking at the price trend of GBTC, it has now reached $33.75, the highest since FTX declared bankruptcy last November. The recent trading price for bankruptcy claims is $0.6 to $0.65, with a recovery rate of over 60%, and as the asset recovery approaches, the price continues to rise.