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Bitcoin Struggles to Hold $40,000 Amid Grayscale’s $700 Million Outflows

Bitcoin faced significant pressure as it struggled to hold the $40,000 mark on January 22, coinciding with the Wall Street opening bell.

This downward trend was exacerbated by ongoing BTC sales from Grayscale, a prominent asset manager.

Data from Cointelegraph Markets Pro and TradingView confirmed that Bitstamp witnessed Bitcoin hitting new six-week lows at $40,324.

While BTC’s price had shown relative stability over the weekend, the new week brought continued selling pressure due to the Grayscale Bitcoin Trust (GBTC) reducing its assets under management.

In response to the recent approval of its transition to a spot Bitcoin exchange-traded fund (ETF), GBTC experienced outflows totaling 19,250 BTC, equivalent to $785 million, on January 22, according to live data from Arkham, a crypto intelligence firm.

Some sources even estimated the outflows to be as high as $700 million, as noted by Alex Thorn, head of research at Galaxy, a crypto reconnaissance firm.

Eric Balchunas, an ETF analyst at Bloomberg Intelligence, expressed concerns that these massive sales, conducted as transactions with Coinbase, might be too substantial for other ETF players to absorb.

Despite these challenges, the new spot ETF cohort continued to receive net positive inflows.

GBTC still held over $20 billion in assets, with its share price trading at just a 0.27% discount relative to BTC spot prices as of January 19, according to data from Bitcoin Treasuries.

Bitcoin’s price remained resilient, maintaining support at the $40,000 level despite increasing speculation of further declines.

Many traders started eyeing the mid-$30,000 range as a potential entry point for long positions.

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The BTC/USDT order book on Binance, a major global exchange, showed growing interest from buyers at $38,500.

Material Indicators, a trading resource, observed that Bitcoin often experienced significant price fluctuations within the first few hours after the US market opened, often linked to ETF flows occurring at the start and end of trading days.

Arthur Hayes, former CEO of BitMEX, shared the sentiment, describing the BTC/USD market as “heavy” and joined others in predicting further price declines.

Despite these challenges, the cryptocurrency market continued to draw attention and interest from investors, with its future trajectory remaining uncertain.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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