Grayscale has been dumping billions worth of Bitcoin (BTC) into the market for the past eight days. This comes amid the high trading volume experienced by its spot Bitcoin exchange-traded fund (ETF). Could there be a more nefarious reason behind its move?
Nearly $4 Billion of Bitcoin Outflows in Over a Week
A couple of hours ago, it was revealed that Grayscale once again dropped tens of thousands worth of Bitcoin, which was equivalent to $515,000,000. This puts its total outflow to $3.97 billion in just eight days.
Previously, most of Grayscale’s outflows were attributed to the bankruptcy estate of FTX as investors of the Grayscale Bitcoin Trust (GBTC) liquidated around 22 million shares upon their conversion to spot Bitcoin ETF. Analysts claimed the massive dump last Monday could be the end as FTX has presumably depleted its GBTC shares already.
It, therefore, comes as a surprise that the crypto asset manager continues to sell off a large chunk of its BTC holdings. Now, the crypto community is none too pleased as the firm’s move is blamed for the added ripples in Bitcoin prices.
As BTC continues to tank below the $40K range, conspiracy theories about Grayscale are presently beginning to surface.
Why is Grayscale Selling Its Bitcoin Haul?
The whale BTC transactions of Grayscale coupled with the dipping prices of the crypto and all the FUD going around are currently generating plenty of speculations in the market. Conspiracy theories are being floated in an attempt to make sense of what the bigger picture is.
These range from the sensical to the absurd. Even so, some of them are just hard to ignore because of their plausibility, given the current state of things.
One popular theory is that Grayscale may be trying to manipulate the market. But then again, this begs the simple question, “Why?”
Some members of the community suspect that Grayscale may be intentionally tanking the prices to wash out the retail investors. This way, the institution and its Wall Street buddies can buy more as the prices hit a dirt-cheap entry point.
Let’s not forget that there’s the Bitcoin halving coming up, which could inflate BTC prices as an all-new level of scarcity for the digital asset is realized. So, buying at the dip will let investors, particularly whales, reap an unprecedented amount of wealth once the coin pops to record-level highs.
The abovementioned scenario, however, is just a simplistic analysis of a potential short-term outcome. A long-term HODL of the digital asset and massive accumulation of its supply could mean control of its flow going forward.
Either way, these both paint a bleak scenario that might eventually deconstruct the decentralized fabric of Bitcoin, which would ultimately defeat Satoshi Nakamoto’s vision. With that, maybe it’s time to pay more attention to the sound alternatives laid down by altcoins.