FTX Estate Sells Majority of Grayscale Bitcoin Trust Shares
In a significant financial move, the estate of the now-defunct crypto exchange FTX and its associated hedge fund, Alameda Research, sold more than two-thirds of its holdings in the Grayscale Bitcoin Trust (GBTC). This sale, reported by Bloomberg on January 22, involved the liquidation of approximately $1 billion worth of GBTC shares.
Prior to January 11, when the GBTC was converted into a spot exchange-traded fund (ETF), the FTX estate held about 22.28 million shares, valued at around $902 million. Post-conversion, FTX sold a substantial portion of these shares over three days of trading, reducing its holdings to less than 8 million shares, now worth roughly $281 million.
This move comes amid Alameda Research's legal battle against Grayscale for allegedly imposing excessive fees and enacting a “self-imposed redemption ban” on its shareholders. The lawsuit, which highlighted restrictions on shareholders from acquiring Bitcoin held by the trust, was dropped on January 22 by Alameda.
The conversion of GBTC into an ETF by the United States Securities and Exchange Commission (SEC) allowed redemptions for authorized participants. This change led to a significant reduction in the shares’ discount versus the net asset value, aligning the price of GBTC shares closer to the actual value of the Bitcoin they represented.
FTX's decision to offload a majority of its GBTC shares has raised speculation about the impact of such large-scale liquidations on the broader cryptocurrency market. Analysts are closely watching the effects, especially considering the ongoing adjustments in the crypto asset management landscape.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
