Grayscale Sales Impact: Crypto Bulls Shed $217M from Bitcoin Value

• Betting on Rising Crypto Prices Leads to $217M Liquidations in 24 Hours
• Grayscale's Potential Sale Contributes to Price Drop
• GBTC Shares Flipped to a Discount, Other ETFs Absorb Sales
• Cryptocurrency Market Experiences Widespread Retreat
• Price Drops Results in $217M in Losses from High Leverage Futures
• Crypto Market Predicted to Remain Range-Bound

Betting on Rising Crypto Prices Leads to $217M Liquidations in 24 Hours

Bets on increasing cryptocurrency prices led to approximately $217 million in liquidations in the past 24 hours. This was largely due to the continuation of the sell-the-news event, triggered by the recent approval of spot Bitcoin$42,260 -0.64% exchange-traded funds (ETFs). This counterintuitive wager shows no signs of slowing down.

Grayscale's Potential Sale Contributes to Price Drop

Concerns about Grayscale, a cryptocurrency fund, liquidating its Bitcoin holdings played a significant part in the price drop. This speculation arose as a result of its holders selling shares in its GBTC ETF. Grayscale's verified wallets, which are tracked and identified by Arkham, an analytics firm, indicate that the fund transferred over $400 million worth of BTC to Coinbase Prime. This move is likely in anticipation of a future sale.

GBTC Shares Flipped to a Discount, Other ETFs Absorb Sales

On Thursday, GBTC shares were reported to have switched to a 0.9% discount due to probable selling pressure. However, with BlackRock's IBIT exceeding $1 billion in assets under management (AUM) on Wednesday, it is likely that other ETFs are absorbing the majority of these sales.

Cryptocurrency Market Experiences Widespread Retreat

Bitcoin fell below $42,000 late on Thursday, marking a 3.7% decrease since Thursday and a 15% drop from December's peak of $49,000. This triggered a retreat across the market, with Ether (ETH) decreasing by 2.5%, Solana$104 5.03%'s SOL dropping by 6.5%, and Cardano's ADA falling by 5%.

In contrast, BNB$312 -5.65% Chain's BNB outperformed the market, seeing a 0.6% increase. This was due to launch pads on the closely associated Binance exchange, where users have the opportunity to stake BNB in order to gain allocations of new projects listed on the platform.

Price Drops Results in $217M in Losses from High Leverage Futures

The decline in price led to significant losses from highly leveraged futures, betting on higher prices. These losses amounted to $217 million, with Bitcoin trades accounting for $88 million in liquidations.

Liquidation happens when an exchange forcefully closes a trader's leveraged position due to partial or total loss of the trader's initial margin. This occurs when a trader fails to meet the margin requirements for a leveraged position, lacking enough funds to keep the trade open.

Crypto Market Predicted to Remain Range-Bound

Meanwhile, some traders have reported on Friday that they expect the broader cryptocurrency market to remain range-bound in the short term. According to Rachel Lin, CEO and co-founder of Singapore-based SynFutures, BTC appears to be hovering above the $40,000-$42,000 zone which is expected to act as short-term support.

The ETF mania phase appears to be over, and the market is moving sideways, in search of the next trigger, Lin added.

Edited by Jonathan Stoker