After Bitcoin’s nearly 7% drop below $44,000, economist Peter Schiff said on X (previously Twitter) that Grayscale’s Bitcoin Trust (GBTC) may not survive. Schiff questioned GBTC’s capacity to advertise aggressively amid declining Bitcoin prices. Now the skepticism coincides with the rise of rival, lower-fee Bitcoin ETFs, prompting fears about GBTC shareholder abandonment. Here’s what it all means for you.
Schiff’s Cast’s Shadow on GBTC and ETF Rivalry
In a series of X posts on social media, Schiff mentioned the orderly sell-off in Bitcoin, Bitcoin ETFs, and related equities. Schiff attacked investors who speculated on spot Bitcoin ETF approval, indicating they are unloading their shares. Spot Bitcoin ETFs may struggle to liquidate Bitcoin for U.S. dollars due to their prior reliance on Tether for liquidity and price stability.
The launch of spot Bitcoin ETFs by Bitwise Invest, Fidelity, and BlackRock in the U.S. attracted $625.8 million in net inflows. Grayscale’s Bitcoin Trust lost $95 million, raising issues about investor preferences and GBTC’s exorbitant fees. A large Bitcoin transfer from GBTC to a Coinbase Prime deposit address suggests investor assets may be shifting to other ETFs or regular selling.
Scaramucci: Grayscale ETF Sales Fueled Bitcoin Decline
On the other side, despite Bitcoin’s 8% dip to $42,500 after ETF approval, some market analysts have labeled the launch a failure. Anthony Scaramucci, founder of SkyBridge Capital, points to substantial GBTC share sales as a key contributor.
In an interview with Bloomberg Television, Scaramucci highlighted a trend of significant Grayscale selling, with holders converting their shares from a trust to an ETF format. The recent SEC approval of ETFs led many to shift to these lower-fee alternatives, resulting in sell-offs to realize losses.
Having said that, Grayscale Bitcoin Trust, founded in 2013, had a record First-Day turnover of $2.3 billion on Thursday, a milestone for ETFs. Following losses, trust stockholders sought cheaper alternatives, lowering Bitcoin prices below $43,000 on Friday. GBTC shares fell 5.2% to $38.58 on Friday, compared to Bitcoin’s over 160% rise in the previous year.
Scaramucci also pins down the FTX’s role in Bitcoin price selling, adding to the situation. The bankruptcy estate of FTX is liquidating large crypto assets, which he says is lowering cryptocurrency prices. This, together with the approval of Bitcoin ETFs, has increased market selling. Scaramucci expects FTX’s bankruptcy estate selling to reduce the supply overhang in six to eight trading days.
Wall Street’s Move: ETF Marketing on the Horizon?
Additionally, Scaramucci cites a recent Wall Street ETF marketing development. Wall Street’s eight-day silence on these ETFs is expected to end. This suggests a market shift as Wall Street actively promotes and markets Bitcoin ETFs. These elements will likely influence Bitcoin’s direction in the coming weeks as it continues its rollercoaster.
