what's up everyone and welcome to another cantfoldaces Blog!

If you've been following the new lately, and I'm sure you do since we were itching for the United State securities and exchange commission (SEC) to finally approve Bitcoin exchange trading funds (ETF) and obviously, since it'll expectedly onboard many new investors outside the cryptosphere, we were all waiting for an upward movement of $BTC price.

But what happened is this:

Who's behind the Dump

Everyone was shocked and even worst, liquidated, after the sudden turn of event regarding the bitcoin price! This kind of movement can only be explained by one thing: A Dump for a Giga Whale So hear me out:

Grayscale is one of the largest Digital asset and bitcoin holder with over 600k $BTC in holdings, as you have noticed in the graphic below, Grayscale has been selling part of its $BTC holdings daily totalling around 100k $BTC sold starting from the ETF launch till up-to-date at the time I'm writing this post, equalling to around 2.1 Billion dollars worth of Bitcoin.

Now that we knew who's behing this dump, let's talk a bit about how did Grayscale amass such a latge sum of Cryptocurrencies before you decide to dump all your $BTC during this bloodbath:

As a digital asset manager since 2013, Grayscale allows investors to gain exposure to Bitcoin without having to purchase (going through CEXs or DEXs) or store (in any kind of wallet) via a so-called Grayscale Bitcoin Trust (GBTC). This allowed Grayscale to slowly accumulate this given cryptocurrency up to an astonishing 600k BTC in reserve.

However, the ETF approval wasn't the most welcome event for Grayscale as it opponed up the way for huge competitors to emerge naming Blackrock and Fidelity just to name a few.

Luckily I've found of some informations on reddit on how GBTC operates and why it's losing its investors:

• Management fees: Grayscale charge 1.5% annually while competitors ETF issuers charge 6 times less fees like Valkyrie for only 0.25% annually
• Many investors bought GBTC at a 40% discount to the net asset value (NAV) in a hope to profit from that discount. However this premium discount has dropped down to 0% making it a way less attractive option for new investors.

So with the current and new investors seeking better alternatives, Grayscale is due to pay its investors their money which leads to having no other choice than to dump its BTC belongings leading to a huge selling pressure on the market! How long will it take? We never know!

Who's maintaining the price?

So we were talking about not millions, but Billions of dollars in Bitcoin Value and a daily dump of around 44k BTC daily. By reading through these numbers I would be afraid of a crypto market crash but afraid NOT. Not only we have many cryptocurrencies believers and whales that can BUY THE DIP, moreover on a higher scale we have others ETF issuers waiting to get in at a cheaper price :

By reading throught this great summerizing table, first notice the huge difference in fees between grayscale and the other ETFs, then focus on the last line Total for All ETFs showing a positive total result at around 26k BTC.
This shows at the time Grayscale has been selling its Bitcoin, other ETF providers has been scooping up these cheaper coins with Blackrock and Fidelity being the top buyers post ETF approval!

Moral of the story

This is NOT financial advice, always DYOR, understand what's happening before pressing that sell button and regret your decision. Maybe this is a great opportunity to buy the dip especially with Hive ecosystem when you receive half the rewards in $HIVE Power & $HBD as we can use the Hive Backed Dollars to get some cheap $BTC

Source: 1, 2, 3

Posted Using InLeo Alpha