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Exclusive: Bloomberg article analyzes Bitcoin spot ETF: FTX and DCG shorting impact on GBTC

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Exclusive: Bloomberg article analyzes Bitcoin spot ETF: FTX and DCG shorting impact on GBTC

After the listing of the Bitcoin spot ETF for nearly two weeks, Bloomberg ETF analysts James Seyffart and Eric Balchunas collaborated on "FTX and DCG Sales Likely Underpin Grayscale Bitcoin ETF Outflows", analyzing the situation of FTX and DCG unloading GBTC, as well as summarizing the situation after the issuance of the Bitcoin spot ETF.

FTX Has Finished Dumping

Since Grayscale's GBTC fund successfully transformed into a Bitcoin spot ETF recently, the price of Bitcoin has been continuously declining. It was reported a few days ago that the cryptocurrency exchange FTX has sold nearly $1 billion worth of the company's stock.

Bitcoin fell below $40,000 this morning, is it due to FTX dumping GBTC?

Bloomberg reports suggest that FTX's dumping should have come to an end, with an estimated dump amount of $8-9 billion, which aligns closely with our previous reports.

The report also points out that FTX still holds Grayscale's GDLC, LTCN, ETCG, and ETHE. However, Bloomberg analysts believe that since there is a chance for ETHE to transform into an Ethereum spot ETF this year, FTX is likely to temporarily hold onto ETHE and liquidate the other three funds first. From their price performance, GDLC, LTCN, and ETCG have already been affected.

DCG is the Largest Holder

As of the latest statistics released in the report, GBTC outflows amount to $3.45 billion. Apart from FTX, who else is dumping?

The largest "known" holder of GBTC is actually its parent company DCG. They own 35.94 million shares of GBTC, valued at $1.27 billion. The company has faced financial difficulties in recent years, and analysts would be surprised if DCG did not participate in this sell-off. If we estimate the maximum value, FTX and DCG could contribute $2.4 billion in outflows.

Galaxy and Marex Play Crucial Roles in Liquidation

FTX has designated Galaxy as the clearing agent. Galaxy, along with Invesco's J.P. Morgan, participated in the Bitcoin spot ETF BTCO. The Bloomberg report indicates that the Authorized Participants Marex Capital Markets are crucial players in this liquidation process.

Crazy Updates on Bitcoin Spot ETF, AP List Includes Jane Street, JPMorgan

GBTC Selling Pressure Leads to 1% Discount

GBTC is still at a 1% discount, indicating selling pressure. Other Bitcoin spot ETFs are benefiting from buying interest, showing premiums ranging from 0.36% to 0.7%. However, analysts believe that this discount/premium will gradually diminish as arbitrage efficiency increases in the future.

GBTC has the Smallest Spread, Demonstrating Operational Efficiency

Looking at the spread between GBTC and BlackRock's IBIT and Fidelity's FBTC, Grayscale's GBTC actually has the smallest spread, indicating that it has not encountered trading issues after the ETF listing.

The author believes that as a market pioneer, we can also see the scale and efficiency of Grayscale's management. It's no wonder the CEO of Grayscale is so confident in their products and insists on not reducing fees. As for the future of GBTC, will it be pressured by competitors to reduce fees? Can Bitcoin spot ETFs attract the attention of traditional investors in the long term and become a perennial investment product? Let's wait and see!