510 Interactions, 2 today
In July, the greatest single unlocking day will flush sellers from the market, opening up both volatility and bullish potential.
Institutional Bitcoin (BTC) investors are in the limelight as an imminent significant cashout deadline raises the prospect of further market volatility.
As highlighted by renowned Twitter pundit Loomdart and others this week, buyers and sellers of the Grayscale Bitcoin Trust (GBTC) are gaining attention as Bitcoin approaches $40,000.
July means BTC price volatility
GBTC is a behemoth in the institutional Bitcoin industry, with over $24 billion in assets under control.
It is not always available — as noted, the trust runs on a schedule of intermittent closures, which this year have corresponded with its buy-in price trading at a discount to the market market.
This negative “GBTC premium” has become a huge talking topic in and of itself, as invested money are locked up for a specified length of time before being released, allowing investors to cash out at different periods depending on when they bought in.
July will be particularly intriguing for BTC price behaviour due to a mix of a negative premium relative to spot and a substantial unlocking of money. Previously, such an alignment would have resulted in higher volatility.
The highest single unlocking day will be July 19, with 16,000 BTC ($627 million) released.
Bucking a declining trend
According to prominent pseudonymous trader Loomdart, this creates an opportunity for selling pressure to normalise later, opening the door for BTC bulls to shatter existing resistance levels.
U guys realise we are already negating gbtc unlocks and after the bulk of them are over theres like… 0 spot btc sellers left right?
— loomdart (@loomdart) June 14, 2021
This would provide a welcome counterbalance to the generally negative image on institutional markets, with open interest in Bitcoin futures significantly lower than before the May price drop near $30,000.
On-chain analytics resource CryptoQuant noted the decline in interest last week, something which, in turn, came in tandem with a dramatic decline in overall BTC transaction numbers.