Brace Yourself for Bitcoin (BTC) Volatility In July With GBTC Shares Unlocking

By Bhushan Akolkar
Published July 3, 2021 Updated July 3, 2021
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Brace Yourself for Bitcoin (BTC) Volatility In July With GBTC Shares Unlocking

By Bhushan Akolkar
Published July 3, 2021 Updated July 3, 2021

The world’s largest cryptocurrency Bitcoin (BTC) has been showing strong volatility over the last few weeks and will continue this behavior in July as well. All eyes are on the unlocking of the January Grayscale Bitcoin Fund (GBTC), scheduled ahead this month on July 18.

As per data on Bybt, on July 18, GBTC stocks worth 41852.26 BTC shall be unlocked. This will be the largest single-day unlocking of the GBTC shares so far in history.

Courtesy: Bybt

Analysts expect that this unlocking will lead to higher Bitcoin price volatility ahead of this month. Over the last few weeks, the BTC price has been oscillating in the price range of $30,000-$35,000. Earlier this week, BTC made a short attempt to move past $35,000 levels, however, failed to sustain them.

Analysts Divided Over GBTC Share Fluctuations

While crypto analysts have been seriously considering the impact of this unlocking on the price of BTC, we have been getting mixed views about this. Last month, JPMorgan strategists noted that the unlocking of GBTC shares can put further downward pressure on the price of Bitcoin (BTC).

The JPMorgan analysts have been overall bearish on the future price movement of BTC and expect its price to drop to $25,000 along with long-term capitulation kicking in.

While on the other hand, some crypto analysts have a counter view to this. Earlier in January 2021, the GBTC shares (OTCMKTS: GBTC) were trading at around a 20% premium to NAV. Now, they as trading at over 8% discount to NAV as per the latest data from YCharts.

Courtesy: Y-chart

Thus, analysts believe that with the recent unlocking, investors won’t be selling that shares at a discounted rate. This will help to narrow down the gap with the GBTC discount.

Last month, Cathie Wood’s ARK Investment purchased over 1 million additional GBTC shares. The firm now holds over 8 million GBTC shares in total. As of Friday, July 2 closing the GBTC shares were trading at a price of $28.58 per share.

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan Akolkar
778 Articles
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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