FTX Sells Nearly All of Its Grayscale Bitcoin Trust Shares
FTX, the now-defunct crypto exchange, had a stake in Grayscale Bitcoin Trust (GBTC) shares. The FTX estate recently liquidated almost all of its GBTC holdings around 22.28 million shares. However, the estate sold about 2/3rd portion of its GBTC share reserves at the launch of Bitcoin spot ETFs.
Alameda Research also Sold GBTC Shares
On this account, the former trading platform and its associate firm Alameda Research insolvent reportedly sold around two-thirds of its GBTC shares holdings as per a 22nd January report published in Bloomberg.
The report also cited quotes from two insiders who shared information regarding this matter. FTX estate reportedly generated $600 million from the sales of the GBTC shares. This report has also suggested that FTX estate has around 22.28 million GBTC shares in the reserves valued at $902 million before 11th January 2024. Before this timeline, GBTC was a trust and not operating as a Bitcoin spot ETF.
However, after GBTC launched the ETF product, the former exchange sold a massive amount of its GBTC shareholdings. At present, the firm contains around 8 million remainder shares valued at around $281 million.
Alameda Research Drops Lawsuit Against Grayscale
Alameda Research, an affiliate of bankrupt company FTX has retracted the lawsuit against Grayscale. The market maker brought a lawsuit against Grayscale on 6th March 2023, CEO Michael Sonnenshein, DCG Group, and DCG CEO Barry Silbert. The lawsuit purported that the trust hiked trading fees.
The platform also noted that GBTC had been using a self-imposed redemption ban that barred the investors from purchasing more Bitcoin held by the trust. The majority of GBTC investors were unable to redeem shares of the trust before 11th January.
The share price of the trust was fairing at 44% below Bitcoin prices by 15th January. The authorized participants were able to redeem Bitcoin reserves based on their GBTC shares on 11th January after the trust got approval from the SEC to transform into an ETF.
Around the time of GBTC’s transition into an ETF, the discount price of its shares against net value dropped to 1.55% as per YCharts data projections. In this manner, the price of trust’s shares got closely aligned with the value of spot Bitcoin in Grayscale reserves. At press time, the GBTC discount is only around 0.27% in comparison to per share net asset value.
Grayscale to Sell Bitcoin Following ETF Listing
Since 11th January, when the redemption option for GBTC shareholders became available, the Trust fund reportedly sold around $700 million worth of Bitcoin. Financial analysts opine that investors converting to lower-fee ETF options.
In the meantime, Alameda Research dropped its lawsuit against GBTC on 22nd January 2024. The lawsuit was opting to unstake $9 billion or a bigger amount for GBTC shareholders and Ethereum Trusts to be able to collect a quarter of a billion dollars to reimburse FTX consumers and creditors.
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