Key Insights:
- FTX, now bankrupt, sold nearly $1 billion in Grayscale bitcoin fund shares post its conversion to a spot ETF.
- Grayscale’s spot bitcoin ETF experiences significant trading volume, primarily from outflows.
FTX’s Major Asset Liquidation
Yello Paradisers! FTX, the cryptocurrency exchange that declared bankruptcy in November 2022, has reportedly sold close to $1 billion worth of shares in Grayscale’s GBTC fund. This sale occurred after the fund’s recent transition to a spot bitcoin ETF, as per a report by CoinDesk citing anonymous sources and private data.
Grayscale ETF Leads in Trading Volume
Grayscale’s spot bitcoin ETF has emerged as a leader in trading volume among its peers. A significant portion of this volume comprises outflows. According to Yahoo Finance data, Grayscale’s fund accounted for about 54% of all trading volume since the new crypto-based ETFs started trading earlier this month.
Bloomberg Analyst Highlights Outflows
Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, revealed that Grayscale’s fund had experienced a substantial $2.8 billion reduction in value since it began trading.
FTX’s Bankruptcy Proceedings and Asset Sales
The sale of Grayscale ETF shares is part of FTX’s ongoing bankruptcy proceedings. The exchange’s bankruptcy estate reportedly sold all 22 million shares it held in Grayscale’s bitcoin fund. This move is aimed at recouping losses for FTX’s creditors, including individual clients who suffered financial losses due to the exchange’s collapse.
FTX’s Grayscale Holdings and Bitcoin Price Impact
At the end of November, a Delaware bankruptcy court authorized FTX Trading and its affiliated debtors to start selling their Grayscale shares. At that time, FTX’s holdings in Grayscale’s bitcoin fund were valued at approximately $597 million. Meanwhile, the price of bitcoin has seen a decline from nearly $49,000 at the start of spot bitcoin ETF trading to below $41,000, as per data by Coingecko.
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