The Daily Dive #015 Massive GBTC Unlocks Ahead

Over the next 6 weeks, the equivalent of 49,250 BTC will be unlocked via shares of GBTC, as the 6-month lock up period that comes with redeeming shares of the trust concludes for thousands of shares of the trust.

In the Deep Dive 6/12-6-18 Weekly Recap, we covered the dynamic of GBTC share redemptions and lockups, and the effect it had on the market during the later months of 2020 and early months of 2021.

This should be watched closely by investors, as the lower the GBTC discount goes the more that the GBTC vehicle could potentially siphon spot bitcoin demand over the short term, and with the price of bitcoin hovering closely over the $30,000 support level, heavy selling of GBTC shares onto secondary markets could place downwards pressure on the price of bitcoin as the market adjusts to the recently unlocked shares.

On July 12th, the equivalent of 16.24k BTC worth of GBTC shares unlocked, and if immediately sold onto the market, the current discount to NAV that GBTC trades with would surely see further downside.

Investors with access to spot bitcoin markets and GBTC could attempt to arbitrage the discount by longing GBTC and shorting BTC, in what essentially would be a directional bet on GBTC mean reverting back closer to its NAV.

Over the short term, this is one of the biggest catalysts for bears, and could potentially be one of the last entry points at the lows of the $30,000-$40,000 range as the recent accumulation phase continues along, before a breakout in the later half of 2021.