FTX Sells Nearly $1 Billion of Grayscale’s Spot Bitcoin ETF Shares Amid Bankruptcy

  • The news reveals that FTX, currently undergoing bankruptcy proceedings, has sold nearly $1 billion worth of Grayscale’s GTBC fund shares since the transition of the instrument to a spot bitcoin ETF. 
  • The data, supported by Bloomberg Intelligence, indicates that Grayscale’s fund experienced significant outflows, shedding $2.8 billion in value since the beginning of trading.

In a noteworthy development, bankrupt cryptocurrency exchange FTX has reportedly liquidated almost $1 billion worth of shares in Grayscale’s GTBC fund since the fund transitioned into a spot bitcoin ETF. Citing anonymous sources, this move is seen as part of FTX’s ongoing bankruptcy proceedings, with the exchange facing liquidation as creditors aim to recover losses.

FTX, the defunct cryptocurrency exchange that filed for bankruptcy in November 2022, has reportedly offloaded nearly $1 billion worth of shares in Grayscale’s bitcoin fund. This significant sell-off comes after Grayscale’s flagship fund converted into a spot bitcoin ETF, and the bankruptcy estate decided to sell all 22 million shares held by FTX.

Grayscale’s spot bitcoin ETF has notably led the charts in terms of trading volume among rival funds since its recent inception. Data compiled by Yahoo Finance, based on Bloomberg Intelligence senior ETF analyst Eric Balchunas, indicates that the Grayscale fund witnessed substantial outflows, shedding $2.8 billion in value since its initiation.

The bankruptcy court’s decision in November allowed FTX Trading and affiliated debtors to commence the sale of its Grayscale shares. At that time, FTX possessed approximately 22 million shares of Grayscale’s flagship bitcoin fund, valued at $597 million. Creditors, including individual clients, are banking on the proceeds from such asset sales to recoup their losses stemming from FTX’s bankruptcy.

It’s worth noting that the cryptocurrency market has experienced a shift in prices during this period. Since the inception of spot bitcoin ETFs, the price of bitcoin has declined from nearly $49,000 to less than $41,000 as of the latest update. This market movement adds an additional layer of complexity to FTX’s bankruptcy proceedings and asset liquidation.

FTX’s Massive Grayscale Sell-Off: A Crucial Chapter Amidst Bankruptcy

FTX’s substantial sale of Grayscale’s spot bitcoin ETF shares marks a significant chapter in its bankruptcy proceedings. The move, driven by the bankruptcy estate, highlights the complexities involved in balancing the interests of creditors and the evolving dynamics of the cryptocurrency market. As FTX continues its asset liquidation to settle debts, the impact of these transactions on both the exchange and the broader crypto landscape will be closely monitored.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Mehar Nayar

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