Anthony Scaramucci, founder of SkyBridge Capital, suggests that the recent decline in Bitcoin’s value, following the introduction of exchange-traded funds (ETFs) holding the cryptocurrency, is linked to significant sales of Grayscale Bitcoin Trust (GBTC) shares. During a Bloomberg Television interview on Friday, Scaramucci noted a noticeable increase in selling activity related to Grayscale.
The hedge fund manager observed that shareholders, who recently converted their shares from a trust after receiving approval from the U.S. Securities and Exchange Commission (SEC) for ETFs, were opting to sell GBTC shares to realize losses and transition to lower-fee alternatives.
Zach Pandl, Grayscale’s managing director of research, countered the notion that selling one Bitcoin product to acquire another should impact Bitcoin’s overall price. He emphasized that the potential approval of spot Bitcoin ETFs had been a topic of discussion since Grayscale’s court victory in the summer. Pandl noted that, given Bitcoin’s significant valuation increase, it’s natural to witness some profit-taking in the asset.
GBTC, existing since 2013, experienced a remarkable first-day turnover of $2.3 billion on Thursday, setting a record for ETFs. Despite being one of the most popular means to gain exposure to Bitcoin, the cryptocurrency fell from a two-year high of over $49,000 on Thursday to below $43,000 on Friday.
Shares of GBTC reflected this decline, falling 5.2% to $38.58 on Friday, although they had surged over 300% in the previous year, outpacing Bitcoin’s approximately 160% increase.
Scaramucci also pointed to the FTX bankruptcy estate as a contributing factor to the current selling pressure in Bitcoin. FTX, once a major crypto exchange, filed for bankruptcy in 2022 amidst a market crash. Despite the bankruptcy, FTX still holds substantial crypto assets and is in the process of unwinding.
Additionally, Scaramucci highlighted a quiet period on Wall Street concerning the marketing of ETFs, which is expected to end in approximately eight days. The end of this quiet period may introduce new dynamics to the market as Wall Street starts actively promoting the ETFs.
In conclusion, Scaramucci anticipates the selling pressure on Bitcoin to subside in the next six to eight trading days, emphasizing a confluence of factors contributing to the current market trends.
