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For the past few weeks, the question of whether a potential sale linked to a multi-billion-dollar Bitcoin (BTC) mutual fund would lower the cryptocurrency’s spot price has made analysts think. The argument that experts draw attention to is about the Grayscale Bitcoin Trust product, which allows institutional investors to invest in BTC.

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How will GBTC affect the price of Bitcoin (BTC)? Here are the cool reviews of analisdollar

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Investors buy GBTC shares directly through Grayscale with daily private placements, paying in Bitcoin or dollars. However, investors can only sell GBTC shares to other parties after a six-month lockdown period in the secondary markets. Therefore, they expect to liquidate at a premium when the market price of BTC at the time of sale rises above the asset’s value. The Grayscale premium has been trading at a discount since February 24, 2021. Therefore, if investors decide to dispose of their GBTC holdings, they will be at a loss.

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Some analystsdollarser, including strategistdollarser at JPMorgan, believe that accredited investors will sell at least some of their GBTC holdings after the July unlock period, and therefore the BTC market downtrend will worsen. “Despite this week’s correction, we do not want to give up on our negative outlook for BTC and crypto markets more generally,” Nikolas Panigirtzoglou, chief strategist at JPMorgan, wrote in a note to clients. So despite some improvement, our signals are generally bearish.”

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Is the BTC price related to the unlock date of GBTCs?

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Panigirtzoglou announced that GBTC shares were bought by investors in December 2020 at a premium of about 40%. In December, inflows of 2 billion dollars and in January 1.7 billion dollars were seen. This means that around 140,000 Bitcoin worth of shares will be unlocked by the end of July. About 139,000 Bitcoins were released from mid-April to mid-June, this also coincided with the date when BTC dropped from $65,000 to $28,800.

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As we mentioned before , Lyn Alden, the founder of Lyn Alden Investment Strategy, drew attention to the correlation between the collapse of the Bitcoin price and Grayscale’s GBTC unlock periods, and stated that the same things can happen with the unlocking of more shares in July.

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