Hey Chaps,
Glad to see there is a time when Elon is talking and it is not complete Bitcoin FUD... 😏
Speaking of FUD, I do want to remind you that the original authors behind the "Grayscale Unlock" theory were the chaps over at JP Morgan.
https://www.coindesk.com/grayscale-unlockings-poses-downside-risk-to-bitcoin-price-jpmorgan-says
TLDR: JP Morgan strategist Nikolaos Panigirtzoglou claimed that these GBTC unlock periods could see massive selling pressure on Bitcoin. The theory was that the moment that these institutional investors were able to finally sell their GBTC shares, they would jump at the opportunity and sell (given the negative premium)
This GBTC selling would then also lead to downward pressure on Bitcoin prices.
Of course, this theory did not go unchallenged. Kraken released their June crypto intelligence report that disputed these asertions:
https://kraken.docsend.com/view/9cc9sb3wskj9jiht
Their main arguments were that this GBTC premium trade was done in a market neutral fashion. These were arbitrage trades that were made delta neutral by shorting Bitcoin in the futures market. To quote the report:
"The unlock means that market participants who attempted to arbitrage GBTC's premium can hold onto their GBTC shares and keep their short on (meaning there is no net-selling of BTC). However, market participants could also sell their GBTC shares and cover their spot/futures short, which would result in net-buying"
So, basically, they were making the argument that it could even lead to positive price pressure.
However, in the lead up to these unlocking events you will have seen a slew of coverage from several media outlets. It was talked about as if it was some cataclysmic event for Bitcoin. Here are some of these headlines:
On Sunday we had the biggest unlock taking place. On Monday, when the shares hit the market, prices were relatively flat. Even if some institutional investors were unwinding their GBTC positions, there were buyers ready to pick it up:
https://bitcoinmagazine.com/markets/ark-invest-300000-grayscale-bitcoins-shares-buy
While Bitcoin did take a bit of a dip yesterday, that appears to mostly have been because of it tracking the Equity markets in a "risk off" slant.
The point is that this was a classic example of FUD being thrown on the crypto markets.
Now, even though JP Morgan may not be the biggest fan of Bitcoin and does not view it as an "asset class", its High Net Worth Clients think otherwise.
It's pretty cool to see that these guys are telling JPM: I don't care what you think, I want to trade!
I think even more people should stop caring about JPM think (or say) 😉
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