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- A recent analysis by Kiarash Hossainpour, founder of Colorways Ventures and The Consensus, shows that a massive sell-off might be on the horizon.
- The experts reveal that 281,045 BTC ($12 billion) is still under selling pressure and could bring a huge shake-up in 2024.
A recent analysis shows that billions worth of Bitcoin (BTC) could flood the market, potentially triggering a price plummet. A long-thought fear in the crypto community is about to actualize according to a recent analysis. With the entry of institutional investors, many believe that these institutions will not be quick to trade but there is fear that when they make moves, it has the potential to shake the market. In the case of buying, they cause high demand and drive prices up. On the other hand, when they sell, this causes selling pressure and drives prices lower.
This seems to be actualizing, with analysis from Kiarash Hossainpour, founder of Colorways Ventures and The Consensus, warning that the Grayscale Bitcoin Trust (GBTC) is seeing a high reduction. Its holdings have reduced from 621,000 BTC to just under 580,000 BTC since the launch of its Bitcoin spot ETF. The analysis notes that Grayscale’s annual fee is higher than a majority of ETF providers. In the case of Bitwise, this stands at 0.2% and BlackRock is 0.25%. GBTC’s annual fee is 1.5% and his history is also a key factor.
The analysts reveal that 281,045 BTC ($12 billion) is still under selling pressure and could bring a huge shake-up in 2024.
Q1 2024 Bitcoin-Schockwelle: Die größten BTC-Verkaufstreiber im Überblick 📉👇
🟧 Grayscale: Von 621.000 BTC auf knapp 580.000 BTC reduziert seit ETF-Launch. Bei einem negativen Premium von teilweise 50% im Sommer besteht ein potenzieller ausstehender Verkaufsdruck von 281.045… pic.twitter.com/oXIrzFcEip
— Hoss (@hoss_crypto) January 19, 2024
Other factors also contribute to the pool of BTC that could flood the market in the coming weeks and months. Defunct exchange Mt. Gox 138,000 BTC ($5.8 billion) could be released in 2024 after 10 years in bankruptcy. However, the release of these BTCs has been delayed several times.
Insolvency proceedings of Celsius and FTX also play a part with the two companies holding 38,000 BTC ($1.6 billion) and approximately 20,500 BTC ($850 million) respectively. Furthermore, approximately 32,000 BTC ($1.35 billion) is held by miners in advance of the next halving as well as 194,188 BTC ($8.3 billion) held by the U.S. government.
Notably, some of the holders will be encouraged to hodl their holdings in anticipation of a price rally in the upcoming halving. Historically, BTC prices have rallied prior to the halving and in the months that follow.
In 2012, when the block reward was slashed from 50 BTC to 25 BTC, the price shot up from $13 to a peak of $1,152 the following year. In 2016, the price shot from $664 to a record, $17,760 the following year. This scenario repeated itself in 2020 after prices shot from $9,734 to the current ATH of $69,000. Judging by its history, the scenario is destined to repeat.
At the time of press, BTC is trading at $40,500 after a 3% drop in the last 24 hours. This has seen the token extend its weekly losses to 4%.
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