- Grayscale’s Bitcoin (BTC) holdings reduce post-ETF launch, raising concerns about potential sell-offs.
- MtGox’s long-awaited distribution of 138,000 BTC, Celsius and FTX insolvency proceedings, miners’ sales, and US government periodic BTC sales contribute to the forecast.
As we step into 2024, the Bitcoin landscape is poised for a potential shockwave, with various factors aligning that could trigger significant sell-offs of Bitcoin (BTC), the leading cryptocurrency.
A significant player in this unfolding scenario is Grayscale. Following the launch of its Exchange Traded Fund (ETF), Grayscale has reduced its BTC holdings from 621,000 to nearly 580,000. This reduction becomes noteworthy, especially considering the negative premium that reached 50% during the previous summer. Concerns arise about potential outstanding selling pressure, estimated at approximately 281,045 BTC, valued at around 12 billion USD.
MtGox’s Long-Awaited Distribution
The infamous MtGox, associated with one of the most significant Bitcoin exchange collapses, is set to release 138,000 BTC, worth about 5.8 billion USD, after a decade in insolvency. Distribution is expected as early as Q3 2024, barring further delays. Part of this release will be automatically converted to fiat currency, while the rest will be distributed ‘in-kind.’
Contributing to the sell-off forecast are the insolvency sagas of Celsius and FTX. Celsius is managing around 38,000 BTC (1.6 billion USD), with a liquidation plan anticipated by the end of January. FTX, holding approximately 20,500 BTC (850 million USD), faces a potential mid-2024 distribution, entirely converting its holdings to dollars if the current insolvency plan proceeds.
Bitcoin Miners’ Anticipated Sales
Bitcoin miners, particularly in the US, reportedly hold about 32,000 BTC (1.35 billion USD) ahead of the next halving event. Analysts expect these holdings to be sold throughout 2024. It’s important to note that this figure only represents the holdings of public US miners; the actual global miner inventory is likely much larger.
Finally, the US government holds a significant 194,188 BTC (8.3 billion USD) acquired through criminal seizures. Typically, these are sold periodically in batches.
Understanding that each seller has its timeline is crucial; these events won’t occur simultaneously. This staggered approach could mitigate the overall impact on the Bitcoin market. As a blockchain expert, closely monitoring these developments is imperative, as they will undoubtedly shape the Bitcoin narrative in 2024.