- GBTC bitcoin trust unlocking causing price volatility, but selling pressure seems to be slowing based on declining outflows
- Bitcoin prices bounced back after plunging below $39k, recovering over 5% on Friday to $42k and turning weekly performance positive
- Bitcoin mining stocks like Riot and Marathon outperformed Bitcoin this week, gaining 9-11% compared to Bitcoin’s volatility
Grayscale Outflows Slow
On Thursday, one of the lowest days for net outflows from GBTC was recorded, marking the third consecutive day of declining outflows. This could signal the start of a slowdown in redemptions, according to Needham’s John Todaro.
While it’s been hard to quantify how much more will come out of GBTC, Todaro believes two major drivers of selling – outflows from FTX and arbitrage funds – are nearly over. As JPMorgan strategist Nikolaos Panigirtzoglou observed, most GBTC profit-taking has already happened. This implies downward pressure on Bitcoin from GBTC is largely behind us.
Bitcoin Bounces Back
After plunging below $39,000 earlier this week for the first time since December, Bitcoin prices rebounded. The cryptocurrency climbed over 5% on Friday to $42,048, pushing its weekly gain into positive territory, according to Coin Metrics data.
The pullback wasn’t as drastic as some analysts expected. Although Bitcoin’s long-term uptrend remains intact, some projected it would fall to $36,000.
Bitcoin Miners Outperform
Bitcoin mining stocks like Riot Platforms and Marathon Digital have outperformed Bitcoin itself this week. Riot is up 9%, on pace for its first positive week in five. Marathon has gained 10% and is tracking for an 11% weekly increase.
The bottom line is that while Bitcoin has been volatile, fears of heavy selling pressure from GBTC seem to be fading. This could pave the way for a recovery from its recent slide.