Bitcoin Bounces as Grayscale Slows Down Sales

Despite Bitcoin (BTC) taking a heavy hit on Tuesday, it's up today—and has broken above $40,000 again.

CoinGecko data shows that the biggest digital coin by market cap has bounced above $40,000 multiple times so far on Wednesday, and currently sits at $40.050. It's up more than 2% on the day.

Bitcoin has steadily dropped in price since long-awaited spot exchange-traded funds (ETFs) hit Wall Street on January 11.

First, the price of the asset shot up and nearly touched $49,000 for the first time since 2021. But then it took a hard hit. This is because Grayscale's Bitcoin Trust (GBTC) is experiencing outflows following its transition to a proper spot ETPF. Before, the fund traded like a closed-end investment vehicle, and investors couldn't redeem shares.

But now, they want to cash out, experts told Decrypt. Over half a billion dollars worth of GBTC cashed out in the first few days. This is leading to pressure on the price of the biggest cryptocurrency—and the rest of the market, too.

But the selling pressure is now calming, according to the latest figures from Bloomberg ETF expert Eric Balchunas. He wrote on Twitter (aka X) last night that GBTC's outflows on Tuesday were not as large as expected, and down from Monday's tally. It could explain why BTC is on the way up after recent losses.

Arkham Intelligence data showed that at the time of writing, GBTC had this morning (Eastern Time) sent a total of more than $213.8 million worth of BTC to Coinbase, its custodian.

Ethereum (ETH) has also taken a hit since the market crash; over the past week it's down more than 14%. But the second-biggest digital asset is now trading for $2,235, having jumped just over 1% on the day.

Other notable gainers on Wednesday include Solana (SOL), up 5% to about $87, and Avalanche (AVAX) with an 8% gain to a price above $31. That puts Avalanche back over Dogecoin for the 10th largest cryptocurrency by market cap, per CoinGecko.

The entire cryptocurrency market cap today stands at $1.63 trillion, a 2.8% rise in 24 hours, according to CoinGecko.

Edited by Andrew Hayward