Bitcoin remains unfazed by GBTC stream as tokens experience double-digit surge
The broad market experienced a significant increase in total crypto market capitalization, rising by 3%. Despite the reduced sell pressure caused by outflows from Grayscale’s GBTC ETF, Bitcoin managed to weather the storm and surged above $41,000 on January 26th. This positive development in Bitcoin’s price had a ripple effect on the market, as the prices of hundreds of cryptocurrencies also appreciated. CoinMarketCap reported that 10 tokens saw double-digit price increases within the last 24 hours.
Among these tokens, the Bitcoin BRC-20 token 1000SATS (SATS) stood out with a remarkable 21% jump in price. Conflux (CFX), often referred to as ‘China’s Ethereum,’ followed closely with a gain of over 15%. Ethereum Name Service (ENS) also experienced a significant increase, rising by 14%. Conflux further excited the market by announcing the expected launch of a Bitcoin L2 solution by mid-year, while ENS received praise from Ethereum co-creator Vitalik Buterin earlier in January.
Other tokens that made it to the list of top gainers on January 26th include Akash Network (AKT), Optimism (OP), Near Protocol (NEAR), Bonk (BONK), ORDI, Chiliz (CHZ), and OKB.
The consecutive negative net flows for Grayscale’s GBTC ETF, which had been a cause for concern, may be slowing down. Analysts at JPMorgan suggest that profit-taking, most likely from arbitrageurs trading GBTC’s net asset value discount, has led to outflows of around $3 billion. Additionally, the FTX estate, led by CEO John J. Ray III, offloaded approximately $1 billion of Grayscale converted Bitcoin ETF, contributing to the total $4 billion shed by GBTC in just over two weeks. Bloomberg expert Eric Balchunas predicted a 25% decrease in Grayscale’s BTC ETF market cap. Currently, GBTC holds over $20 billion in value and Bitcoin.
It is also possible that investors have rotated their funds into ETFs with lower fees. Grayscale charges an industry-high 1.5% fee, while competitors offer significantly lower fees ranging from 0.21% to 0.35% after fee waivers.
Overall, the market sentiment remains optimistic, and the recent developments in Bitcoin’s price and the performance of various tokens indicate a positive trend in the crypto market.
