This Sunday (July 18), Grayscale Bitcoin Trust GBTC will usher in the largest single-day unlock - 16,240 BTC worth about 550 million US dollars. At the same time, it is also the most worrying risk event.

In the past half a year or so, it is rare to unlock more than 10,000 bitcoin shares in a single day. On the day when this happened four times before, there were three significant price drops in bitcoin, only in 5 Gains were made on the 20th. Judging from the current situation, many analysts and traders still express concern that this incident will have an impact on the already shaky Bitcoin price and the entire encryption market!

What is GBTC unlocking?

Grayscale Bitcoin Trust is the world's largest Bitcoin-traded encryption fund, operated by Grayscale Investments, LLC, an encrypted asset management company. The investment vehicle allows individual and institutional investors to participate in Bitcoin transactions without having direct exposure to the crypto asset.

Accredited investors can directly buy shares in the fund and then sell them after being locked in the secondary market for 6 months, under the ticker symbol GBTC.

Since its establishment, the GBTC fund has been very popular among investors, generating a premium of more than 40% at one point because it is the only open market instrument available for trading BTC and is considered the second-best Bitcoin exchange-traded fund (ETF). best option, especially since such products have not yet been approved by U.S. regulators.

The situation has changed in recent months. On the one hand, affected by the market, GBTC's stock has begun to discount sharply, prompting Grayscale, the largest buyer of Bitcoin, to stop buying more BTC.

On the other hand, while bitcoin ETFs are not yet listed in the US, other countries such as Canada, Brazil and Dubai already have bitcoin exchange-traded funds, giving investors more options than GBTC stocks.

Will GBTC affect the price of Bitcoin?

Once GBTC is unlocked, investors can choose to liquidate their shares at the current market price, or continue to hold them for future sale.

Given the flagging sentiment, several analysts, including JPMorgan, predict that investors are more likely to liquidate their holdings, which could put downward pressure on the price of Bitcoin and GBTC.

Bitcoin’s medium-term fair value is between $23,000 and $35,000, they said, adding they were “generally bearish.”

However, represented by QCP Capital analyst, encryption service provider Amber Group, and bitcoin analyst Willy Woo, said the incident had little impact on the market.

Willy Woo believes that the unlocking of GBTC has a direct impact on the encryption market, but the effect is relatively slow, and the long-term overall impact is neutral, because all arbitrage will be balanced in time, although the short-term imbalance between supply and demand may affect the price, the investment in selling GBTC Investors will have to repurchase to make up for the volatility loss of short-term trading.

Thinking brought about by the unlocking of GBTC sky volume

Perhaps because of the prediction that the overheated investment in the encryption market will bring pressure on its own development, Grayscale Bitcoin Trust has suspended new investment in March this year and has not opened a new investment window so far. Considering its 6-month lock-up period, the impact of GBTC share unlocking on the market will continue until September this year.

This process will take as long as 3 months, and it will still bring many uncertainties to the encryption market. When assets with large circulation volume respond to the short-term supply and demand imbalance caused by market sentiment, the impact of the downward impact should not be underestimated.

YB, as the only settlement token of Yihuo.com, is less affected by this aspect. Its real purpose is to solve the pain points of token circulation scenarios and application scenarios, and realize diverse ecological circulation and scenario applications.

According to previous reports, Grayscale stated that it will be 100% committed to converting GBTC into an exchange-traded fund (ETF), and the timing will depend on future regulatory situations.

In other words, if the discounted part of GBTC is bought by long-term bulls, then the negative premium may become profitable. However, this first depends on the fact that Grayscale GBTC cannot have an impact on investor confidence, and we will wait and see.