(Bloomberg) — Bitcoin’s decline since the start of trading of exchange-traded funds that hold the cryptocurrency was driven in part by sales of Grayscale Bitcoin Trust shares, according to SkyBridge Capital founder Anthony Scaramucci.
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“There seems to be of lot of selling of Grayscale,” Scaramucci said during a Bloomberg Television interview on Friday.
The hedge fund manager said that his trading desk noted that holders of the shares, which were converted from a trust this week when the US Securities and Exchange Commission signed off on the ETFs, were selling to book losses and shifting to lower fee alternatives.
Selling one Bitcoin product to buy another should not impact Bitcoin’s price, said Zach Pandl, Grayscale’s managing director or research. The potential approval of spot Bitcoin ETFs has been a topic of conversation since Grayscale’s court victory last summer. Following the sharp run-up in Bitcoin’s valuations, it’s natural to see some profit taking in the asset, he said.
GBTC, which has existed since 2013, posted $2.3 billion in volume on Thursday, the largest first-day turnover ever for an ETF. It has been one of the most popular channels to gain exposure to Bitcoin. On Thursday, the original cryptocurrency broke through $49,000, hitting a two-year high. It fell below $43,000 on Friday.
Shares of GBTC fell 5.2% to $38.58 on Friday. They surged more than 300% last year, compared with an increase of almost 160% for Bitcoin.
“The second thing we are seeing is the bankruptcy estate of FTX is unloading into the ETF announcement,” Scaramucci said. “There is a heavy volume of selling in Bitcoin right now. I do expect the supply overhang to be done in the next six to eight trading days.”
FTX, which was one of the largest crypto exchanges, filed for bankruptcy in 2022 along with a flurry of major crypto companies amid a market crash. It still holds large amounts of crypto assets and is in the process of unwinding.
“One last thing, there has been a quiet period for the Wall Street. Wall Street has not been able to market these ETFs and that will start in about eight days as well,” Scaramucci said.
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