What if Grayscale had to sell all 643,572 bitcoins it has? Let's speculate.

stompix

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Quote from: Oshosondy on November 30, 2022, 07:38:11 AM

What happened to crypto market when FTX collapsed?

FTX didn't have any coins to sell, it was all just debt, so it couldn't have affected the market that much, unlike Terra for example who had to liquidate their coins in that botched bitcoin-backed stablecoin. Grayscale in this scenario of dumping would probably crash the piece even if would spread it over weeks, it's 10 billion worth of coins with almost no buying power, with every company in debt and everyone seeking loans and a dump would just trigger more bankruptcies, and more money of what is still left fleeing to other "safe" assets.

That being said, Grayscale has zero reasons to sell their coins at this point, absolutely none.

Quote from: Husires on November 30, 2022, 09:11:05 AM

We will start thinking about many hypotheses, and the most expensive you will need a lot of details:

There is another hypothesis, and that's actually the dangerous one because it has declined to publish its proof-of-reserves there is speculation that they actually don't have that many coins. Of course, it would mean fewer coins to dump but also another clusterfuck that would bring down other companies and trigger bankruptcies.

mk4

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I don't think they'd be forced to sell everything as their GBTC investment asset should be backed 1:1 with "real" bitcoin. But in a theoretical sense, if they were forced to sell everything — while there would be significant sell pressure, it wouldn't be as dramatic as most people think as it would be sold slowly and definitely not in one go.

dansus021

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If I was the company Im not going to sold all my bitcoin since maybe there is no liquid cex that can provide that amount of money at the same price, and big company like gryscale is always think twice or more before deciding to sold all the bitcoin and especially the grayscale was investment company and play with cryptocurrency they must know the risk before buying billion of bitcoin

FanEagle

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I fear that they actually do not have this much bitcoin to begin with. I mean that they can't even sell the bitcoins they have because they do not have this much to begin with. They are just becoming a purely bitcoin company and they probably sell some here and there when they need to pay for some stuff, and publicly announce it when they do on their sheets, but that's about it, I really do not think that they have over half a million bitcoins.

Maybe a few thousand, maybe tens of thousands, but not over half a million. That seems like unlikely situation, the whole bitcoin marketcap is small compared to that, they would own more than 1% of all bitcoins by this logic, too much.

wxa7115

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Quote from: a298b112 on November 29, 2022, 01:21:43 PM

"Grayscale has used that capital to buy more and more BTC. Now, it's accumulated over 643,572 bitcoins, which is around $10.12 billion in assets as of the time of this writing"

Grayscale for sure is under a lot of pressure right now. As far as I know, they are struggling to find additional funds and one of the possible outcomes of this situation is that they might be forced to sell all the 643,572 bitcoins. How far BTC can drop if this will happen?

Let's speculate.

Everything would depend at the rate they do this, if they simply want to get out of their bitcoin position without making too much noise then they could sell 1000 BTC per day, which is the equivalent of more than 17 millions, and no one will notice as the volume is way higher than that, at this rate in less than two years they will sell all their bitcoin.

However if Grayscale wanted to get rid of their coins in a month then they will need to sell more than 21k BTC per day, which is more than 363 millions, and such a huge amount will definitely affect the markets, especially since people will notice and the news that Grayscale is selling all their coins could crash the market.

adaseb

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This was already discussed last week. They won’t liquidate GBTC. It’s a golden goose for them. They get 2% in fees every year. All this money for doing pretty much nothing. Why get rid of it? No point.

They will just let their other company go into bankruptcy and keep GBTC going. Sure many on Gemini earn will be screwed but don’t they really care about that. If anything most people are blaming Gemini exchange itself.

stomachgrowls

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Quote from: el kaka22 on December 01, 2022, 06:15:32 PM

I have to say it wouldn't "really" be a big trouble. Of course, if they sell it all then the price would crash, but did anything in bitcoins nature changed? Bitcoin is still bitcoin but there is one less whale involved, so the price crash would mean that it should be a temporary one and you could buy when it is low and sell when it is high.

Bitcoin went up before grayscale ever got into it, and it will go up even after it sells all of it. I am not saying price wouldn't crash, maybe it would be under 5k maybe even 1k who knows, but I am 100% certain that it will grow back again and that's the key importance here, if it grows back up, then no drop matters.

They can sell all they want but it wont really be meaning out that it would really be the end of the market specially for Bitcoin.It might really result into crash but there are lots of community believers and supporters

who would really be wanting to see those cheap coins or would be catching up those bargain value coins because as long there's a community demand and support then it is really safe to assume or presume out

that there would be always a recovery after a crash.It might not be known precisely but it would eventually happens or always be next in line.
Just let these institutions do all what they want and we community are just waiting for those opportunities that do come.

el kaka22

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I have to say it wouldn't "really" be a big trouble. Of course, if they sell it all then the price would crash, but did anything in bitcoins nature changed? Bitcoin is still bitcoin but there is one less whale involved, so the price crash would mean that it should be a temporary one and you could buy when it is low and sell when it is high.

Bitcoin went up before grayscale ever got into it, and it will go up even after it sells all of it. I am not saying price wouldn't crash, maybe it would be under 5k maybe even 1k who knows, but I am 100% certain that it will grow back again and that's the key importance here, if it grows back up, then no drop matters.

joeperry

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I have the same thoughts as with the previous response. Grayscale won’t even pursue to obtain and accumulate such volume of bitcoin if they will just end up being forced to sell it, they must have a plan, everybody in this market does. But, if they would allegedly proceed in disposing such, this will undoubtedly affect the market. And as mentioned, this will be a matter of when, how much and approach of selling their coins to the market. And if that happens, we could assume to see a huge drop, but it’s not an indication that it will be end. Surely, there are a lot of traders who are just waiting to buy more coins at this time, and that’s just one of the many factors that could let the circulation of the market to continue, then eventually to its way up to recovery.

Husires

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We will start thinking about many hypotheses, and the most expensive you will need a lot of details:

Who is ready to buy 643,572 bitcoins?
Who will bear the price difference that will happen as the price will decrease if this deal is announced.
Will it be sold for one payment or on several batches?
Will they buy again if the price decreases?

I can only imagine that the price will decrease by 70%. And you will be one of the most stupid deals.

YOSHIE

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Quote from: a298b112 on November 29, 2022, 01:21:43 PM

Let's speculate.

Actually Grayscale has more than 14 digital assets invested, one of which is Bitcoin, of course there are many others.
Proof:
Grayscale Investments Holdings
If I were to speculate, Grayscale's main goal is not to sell the underlying assets of 633.15K BTC and others, you can see their statement here.

Quote

Notice: Grayscale does not sell the underlying assets within its trusts. If Grayscale's products have a decline in AUM, that is because of a decline in the price of the underlying asset.The decrease in holdings (negative number) in the chart refers to the annual fee deducted by the grayscale irregularly.

Point, they only take profit/year of every asset they invest, so they don't sell it.

Franctoshi

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Those Grayscale Bitcoin holdings from a little information I got isn't for short term holding , they invested for the long run and have been buying Bitcoin whenever there's a dip in the market , therefore I don't think they will be affected by the short term pressure and thus liquidate their portfolio. What I'm even thinking is that they might anounce they've Bought another Bitcoin during the FTX collapse.

Oshosondy

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Quote from: a298b112 on November 29, 2022, 01:21:43 PM

Grayscale for sure is under a lot of pressure right now. As far as I know, they are struggling to find additional funds and one of the possible outcomes of this situation is that they might be forced to sell all the 643,572 bitcoins. How far BTC can drop if this will happen?

What happened to crypto market when FTX collapsed? Nothing more than bear market, but bear market can be painful to some people, the people that invested at that time, especially on altcoins which are more volatile, but the crypto market still survive and an opportunity for those that buy after price fall because after bears are bulls. Nothing will happen to bitcoin than its price to decrease further and that does not mean it will not reach ATH when the time to reach that high price comes.

ShowOff

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I'm pretty sure Grayscale isn't going to throw away all the bitcoins they've been holding for so long. Even if they are forced to sell, it is possible that their selling strategy will not be realized by most traders so that it will not damage the market price. After all, Grayscale would probably only sell some of their bitcoin if they wanted to, but not in the current market condition. Throwing bitcoin at the moment in large quantities is only hurting them instead of making a profit.

NeuroticFish

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Quote from: a298b112 on November 29, 2022, 01:21:43 PM

"Grayscale has used that capital to buy more and more BTC. Now, it's accumulated over 643,572 bitcoins, which is around $10.12 billion in assets as of the time of this writing"

Grayscale for sure is under a lot of pressure right now. As far as I know, they are struggling to find additional funds and one of the possible outcomes of this situation is that they might be forced to sell all the 643,572 bitcoins. How far BTC can drop if this will happen?

Let's speculate.

First of all, I don't think that they are that stupid to buy high and sell low. If they wanted to sell, they could have done that when the trend has change.
However, let's speculate: it would depend greatly on how much time they have. If time is not a big issue (but then why don't just wait a couple more months?) then they (or their brokers) would sell so slowly you may not even notice. Then the price may not even go noticeably lower. If they just dump everything (which would be overly stupid for their business too), then the price will go much lower, but I don't know how low - it depends if it's done in steps, it depends where and how big the support amounts are - but going down to 10k, 8k or even lower would not be a surprise, especially as such a move comes with public declarations - sooner or later - and all the panic and drama you can imagine.

a298b112

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"Grayscale has used that capital to buy more and more BTC. Now, it's accumulated over 643,572 bitcoins, which is around $10.12 billion in assets as of the time of this writing"

Grayscale for sure is under a lot of pressure right now. As far as I know, they are struggling to find additional funds and one of the possible outcomes of this situation is that they might be forced to sell all the 643,572 bitcoins. How far BTC can drop if this will happen?

Let's speculate.

Topic: What if Grayscale had to sell all 643,572 bitcoins it has? Let's speculate. (Read 184 times)