Grayscale GBTC’s outflows linked to Genesis’ bankruptcy proceedings: Arkham Intelligence

Grayscale’s total outflows have exceeded $15 billion.

Grayscale’s Bitcoin Trust (GBTC) has faced a wave of sell-offs in recent weeks. According to Arkham Intelligence, this fire sale is likely connected to Genesis’ bankruptcy proceedings, undertaken to settle obligations with victims of the Gemini Earn program.

Arkham Intelligence noted that over the past three weeks, Genesis redeemed over 32,000 Bitcoin (BTC), which is estimated at approximately $2.1 billion. The redeemed Bitcoin was sent to two specific Bitcoin wallets.

Genesis GBTC Redemption Wallets are now on Arkham

Genesis Trading have redeemed GBTC shares worth over 32,000 BTC ($2.1B) over the past 3 weeks, as part of their ongoing bankruptcy process.

The redeemed BTC has been sent to two specific Bitcoin wallets, now labeled on Arkham:… pic.twitter.com/Ix1BsvzSs1

— Arkham (@ArkhamIntel) April 5, 2024

The liquidation follows the settlement between Genesis and Gemini Trust, which resulted in the return of approximately $2 billion to nearly 232,000 Gemini customers. These assets had previously been frozen by Genesis in late 2022.

GBTC has experienced record outflows over the past few weeks, peaking at $642 million on March 18, according to data from BitMEX Research. This trend didn’t slow down until April 3, when GBTC recorded around $75 million in outflows.

[1/4] Bitcoin ETF Flow – April 2024

All data in. $113.5m net inflow pic.twitter.com/jwE1QJmVdj

— BitMEX Research (@BitMEXResearch) April 4, 2024

The potential sell-off of GBTC holdings could be a key factor behind the recent correction in the Bitcoin price, which fell below $67,000 and extended the correction until the end of March, CoinGecko’s data shows.

This news sheds light on the potential role of spot Bitcoin ETFs in recent market movements. When significant inflows occur in these ETFs, it coincides with surges in the price of Bitcoin and the broader altcoin market. Conversely, heavy outflows can put downward pressure on Bitcoin and dampen growth momentum across the crypto market.

Source