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How does Grayscale increase the price of bitcoin?


In the days leading up to the launch of Grayscale, the comments about the impact of this reopening on the price of Bitcoin have increased. A digital currency market expert says that with the reopening of the fund, investors need to repurchase their bitcoins to repay their loans, and this could push up prices.

to the the report CoinDesk The market is likely to grow somewhat as Gary Skill restricts restrictions on selling mutual fund shares in his bitcoin.

Some digital currency market analysts and investors say some GrayScale investors may have to buy some bitcoins to repay the loans they used to make the fund’s original purchases.

A digital currency company called Amber Group wrote on Twitter:

There are many downward whispers about the lifting of the restrictions on Bitcoin Gray Fund, while we do not pay much attention to the fact that payments made through debt ultimately lead to instant purchases.

Last month’s forecast by JPMorgan experts contradicts this; The largest US bank had said that with the end of the restrictions on the sale of shares of the stock fund, the value of the shares of this fund and the price of Bitcoin will decrease.

Experts from Jeep Morgan, led by Nikolaos Panigirtzoglou, published an article on June 24 (July 3):

Selling Bitcoin Gray Fund shares at the end of a 6-month period in June and July can move in the opposite direction of Bitcoin, generally creating a downward pressure on the Bitcoin and stock markets. Bitcoin Gray Cash Scale.

However, now that we are on the verge of lifting the restrictions, digital currency experts have opposed this hypothesis. Although the sale of GrayScale Bitcoin Fund shares can lead to a reduction and elimination of new capital, it seems that the negative impact of this phenomenon will be partially offset by the repurchase of Bitcoin in the instant market.

Jeff Dorman, chief investment officer at Arca, an investment firm in digital currencies, wrote in a report this week:

The biggest perception of limitations [برای فروش سهام] It could happen in up to 2 months, and this could lead to the massive sale of shares of Bitcoin Gray Fund in the open market.

He also said that this could increase the buying pressure in the bitcoin market and that anyone who sells his stock fund shares would buy bitcoins again so that he could take advantage of the difference between the stock price and the bitcoin price.

How can selling the shares of Skill Cashier increase the price of Bitcoin?
Gray Scale Bitcoin Fund Sales Volume Chart in Reopening Periods

The lifting of the restrictions could be a significant development, as the trading of the Skill Cash Fund has been very popular in recent years and until early 2021. According to GP Morgan, the GrayScale Bitcoin Fund had $ 2 billion in revenue in December 2020, a record high for the fund. One month later, in January, the volume of Scale Funds reached $ 1.7 billion.

Wealthy institutional and wealthy investors can directly acquire shares of Bitcoin Gray Fund at net asset value. In this case, the net asset value is highly dependent on the price of the bitcoin. They do this privately and pay for bitcoins or dollars that are either their own or borrowed from them. After the 6-month limit is lifted, the stock will be sold on the secondary market, where micro-investors will also have access to stock trading.

For a long time, and for a variety of reasons, stock fundraising stocks, including premiums, traded 40 percent more expensive than the current price of bitcoin. This seemed like a good opportunity for many investors to make a profit, especially when market sentiment was declining. At the time, there was some fear of a sharp drop in premiums, a reduction in discount rates and a decline in net profit.

However, the bitcoin market has been weak in recent months. In February, the premium or difference in the value of the fund’s fund increased, which gave investors little incentive to make the fund’s stock trading popular again. Sky data show that since Thursday, shares of Skill Cash have traded with a premium of 10.5%.

It has been about 6 months now that the trading of stock fund has been stopped and the trading restriction is to be lifted soon.

Investors who have invested in Scale Funds by lending bitcoins now need to repurchase bitcoins to repay their loans. Likewise, those who intend to deposit into the fund account must buy bitcoins in order to increase their portfolio balance.

Therefore, assuming that supply criteria remain the same, investors’ repurchases after the restrictions are lifted by Gary Skill will increase the price of Bitcoin.

According to the bybt.com website, the reopening period of the stock fund is scheduled for this month and it is expected that 40,000 shares will be released during this period.

One of the biggest days of stock liberalization in this period is July 18 (July 27); 16,000 shares of GrayScale Bitcoin Fund are scheduled to be offered on this day. With restrictions lifted, traders flock to instant markets to buy the bitcoins needed to repay loans or increase the value of their portfolio, which can push up bitcoin prices.

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