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The Grayscale Bitcoin Trust (GBTC) may see outflows of $2.7 billion if it is converted into a spot Bitcoin ETF (exchange-traded fund), potentially putting ”severe downward pressure” on the Bitcoin price, JPMorgan said.
It says GBTC has attracted about $2.7 billion this year from investors attracted to it by its deep discount to net asset value and in anticipation of its conversion to a spot Bitcoin product.
“Assuming this buying flow was mostly speculative in anticipation of GBTC being converted to an ETF, then it is likely that this $2.7b would come out of GBTC as these investors take profit once GBTC gets converted,” said analysts led by Nikolaos Panigirtzoglou. ”If this $2.7 billion exits completely the Bitcoin space then such an outflow would of course put severe downward pressure on Bitcoin prices.”
☕️ GM! Here are the top news in #Crypto for the past 24 hours
🟠 JPMorgan predicts Grayscale Bitcoin Trust (GBTC) could face $2.7 billion outflows upon conversion to a spot Bitcoin ETF.
🟠 Ex-Binance CEO Changpeng Zhao's account restricted on social media platform X after…
— VirtualBacon🦇🔊 (@VirtualBacon0x) November 24, 2023
Funds May Shift To Newly Created Spot Bitcoin ETF Products
Still, Panigirtzoglou said JPMorgan’s best guess is that most of the money shifts into newly created spot Bitcoin ETFs after approval, thus making the market impact more modest.
Amid anticipation over the launch of spot Bitcoin ETFs, some investors are considering products leveraged to the approval like Bitcoin ETF Token ($BTCETF). It’s already raised $1.58 million in presale and sells for $0.0058.
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