GBTC profit-taking could further drive down BTC price:
Profit-taking by GBTC investors causing a drop
JPMorgan analysts predict that the price of Bitcoin could face additional selling pressure in the weeks ahead. This potential price drop could be attributed to investors of the Grayscale Bitcoin Trust (GBTC) who continue to cash in on profits after investing in the fund at a significantly lower price.
Many institutional investors of GBTC had specifically invested in Grayscale’s fund to speculate on the approval of Bitcoin Spot ETFs by the SEC. Now that the ETFs have been approved, these investors are “completely leaving the Bitcoin space,” perhaps not fully convinced of the long-term potential of this asset.
After its recent conversion into a Bitcoin Spot ETF, GBTC has already seen over $1.5 billion in outflows. JPMorgan estimates that up to $3 billion could be withdrawn from GBTC, as speculative investors are likely to take even more profits.
“[…] there could be an additional $1.5 billion leaving the Bitcoin space through profit-taking on GBTC, thus exerting additional pressure on Bitcoin prices in the coming weeks.
Towards a fee reduction for Grayscale’s GBTC?
The substantial withdrawals from the Grayscale Bitcoin Trust (GBTC) could lead the fund to consider reducing its management fees, which are currently seen as excessive compared to those of other Bitcoin Spot ETFs. JPMorgan analysts highlight that GBTC risks facing further outflows, even though fees are not the sole criterion for some institutional investors.
According to experts, GBTC could also lose its edge if other Bitcoin Spot ETFs reach a “critical mass in terms of size and liquidity.” Additionally, analysts add that between $5 and $10 billion more could leave GBTC in the coming weeks.