Grayscales Bitcoin Outflows Cut in Half as Bitcoin Approaches $44,000

• Grayscale has significantly reduced its rate of Bitcoin sales in recent days after a period of aggressive selling that weighed on Bitcoin’s price.
• Earlier in January, Grayscale was selling as much as $2.2 billion worth of crypto assets per day, mostly Bitcoin. This seemed to hurt Bitcoin’s price.
• With Grayscale now slowing its sales by over 50%, analysts believe its aggressive selling may be ending, which could limit future downward price pressure on Bitcoin.

Grayscale, a subsidiary of Digital Currency Group (DCG), has significantly reduced its rate of Bitcoin sales in recent days according to blockchain analysts. This comes after a period of aggressive selling that appeared to weigh on Bitcoin’s price.

Grayscale’s Bitcoin Outflows Plummet

According to Arkham Intelligence, Grayscale moved only $192.6 million worth of Bitcoin to its custodian Coinbase on Tuesday. That’s less than half the average daily volume last week. The reduced outflows suggest that Grayscale may soon stop selling its Bitcoin holdings altogether.

The Impact on Bitcoin’s Price

Earlier in January, Grayscale was offloading as much as $2.2 billion worth of crypto assets per day, mostly in Bitcoin. This torrent of selling seemed to hurt Bitcoin’s price, which dropped below $40,000.

Now, with Grayscale slowing its sales, Bitcoin appears to be recovering. It recently bounced back above $40,000 and was trading around $40,050 at the time of writing. The reduced selling pressure from Grayscale seems to be providing some relief.

Why Did Grayscale Start Selling?

Grayscale began selling its Bitcoin holdings after converting its Bitcoin Fund into a Bitcoin ETF on January 10. Prior to that, it operated as a closed-end fund with a 6-month redemption period. The conversion to an ETF allowed investors to freely trade their shares, prompting a rush of redemptions and sales.

Looking Ahead

With Grayscale’s Bitcoin outflows now dropping by more than 50%, analysts believe its aggressive selling may be coming to an end. This could limit future downward pressure on Bitcoin’s price. However, the path forward remains uncertain. Much depends on broader market sentiment and forces like interest rates and regulation.

Conclusion

In summary, Grayscale has sharply reduced its rate of Bitcoin sales in recent days compared to earlier in January. This appears to be providing some relief to Bitcoin’s price after a difficult period. While the future is unclear, Grayscale ending its wave of selling would remove one significant headwind for Bitcoin.