Sources: FTX sold 22M Grayscale Bitcoin Trust shares, worth nearly $1B, explaining the outflows after the US SEC approved 11 ETFs and BTC's price tumbling since

CoinDesk 2024-01-23 Ian Allison

Context & Ripple Effects

The approval of 11 US bitcoin ETFs immediately concentrated trading in Grayscale, BlackRock and Fidelity, with $4.6B in first-day ETF trading reported across the group. Early fund-flow data then showed net inflows into the new category alongside substantial Grayscale redemptions.

FTX’s asset sales were not wholly unexpected: a court had authorized affiliated debtors to sell Grayscale and Bitwise holdings. The reported GBTC disposal supplies a specific source for the early Grayscale outflows that otherwise sat beside strong demand for rival funds.

First-order effects

FTX’s reported sale removes roughly $1B of GBTC shares from its estate and adds a large, identifiable source of selling pressure to GBTC during the ETF transition.
Grayscale absorbs the immediate outflow while bitcoin’s post-approval price move is more readily interpreted against a major holder’s liquidation, rather than ETF demand alone.

Second-order effects

BlackRock, Fidelity and other newly approved ETF issuers gain a clearer contrast with GBTC: category inflows can coexist with redemptions from an incumbent vehicle.
ETF flow figures become less useful as a single sentiment signal when estate-driven sales and fund-specific redemptions can materially shape the aggregate.

Third-order effects

If large legacy holders continue to exit GBTC while new ETFs attract assets, bitcoin-fund competition will increasingly be decided by which wrapper captures durable allocations rather than by the category’s launch-day trading volume.
The episode underscores that regulated crypto products can transmit bankruptcy-estate and other concentrated-holder activity into public fund flows; separating those effects from organic demand will remain important for market interpretation.

The trend: US spot bitcoin ETFs are shifting bitcoin exposure from a legacy trust toward competing exchange-traded vehicles, while one-off institutional liquidations complicate the transition’s flow data.

Discussion

@0xg00gly @0xg00gly on x
👍 Step 1. FTX steals your funds. Step 2. FTX dumps on you assets they bought with your stolen funds. Step 3. FTX tries to clawback the funds you actually managed to withdraw.
@dogetoshi Steven on x
Alameda drops lawsuit against Grayscale after Grayscale starts letting FTX dump its GBTC holdings.🥴🥴🥴 [image]
@mocryptoreal Muhammad Crypto on x
Hey guys, we can thank @FTX_Official for screwing us again. https://www.coindesk.com/...
@crediblecrypto @crediblecrypto on x
So we know that net ETF flow has been positive since launch (ETF inflows have been greater than GBTC outflows) but now we have just learned that of the 2.2B of outflows from GBTC nearly 50% of that was from the FTX bankruptcy estate and they have no GBTC left to sell. If this...
@splitcapital Zaheer on x
We've reiterated that the most aggressive clients were the ones that were also the most eager to get out. $1 billion in total size of outflow from $GBTC was from the FTX Estate alone. Accounting for almost half of all redemptions thus far. [image]
@0xg00gly @0xg00gly on x
btw if you didn't know FTX would sell their GBTC, this was public knowledge since early November (see bankruptcy docket). The only interesting bit is that the Coindesk article (based on private data) implies this was done early Jan rather than in Nov/Dec. If true: ggwp Novo
@0xfoobar @0xfoobar on x
just a few more bankruptcy estates then up only
@zerohedge @zerohedge on x
Even in death, FTX estate continues to cause havoc in bitcoin, in this case it has sold more than $1 billion in GBTC. Which means inflows into new ETFs are not recycled GBTC exposure but actual new money. https://www.coindesk.com/...
@pythianism Vance Spencer on x
Mashallah we work through the GBTC overhang https://www.coindesk.com/...
r/CryptoCurrency r on reddit
FTX Sold About $1B of Grayscale's Bitcoin ETF, Explaining Much of Outflow: Sources

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