The impending unlocking of over 16,000 bitcoins through Grayscale’s trust in mid-July could bring enhanced volatility in the crypto markets.
With the second quarter of 2021 almost done and July just around the corner, bitcoin might be headed towards a highly volatile month, and Grayscale could receive the blame. This is because one of the largest unlockings from GBTC will take place in the middle of the month as accredited investors will receive access to over $600 million worth of BTC.
Volatility in July Because of GBTC Unlocking?
Founded in 2013, Grayscale is the leading digital asset manager enabling institutional investors to receive exposure to BTC, and other cryptocurrencies, through its funds without having to worry about storing and managing their holdings.
In return, they agree to pay a specific commission and to follow precise rules. One of which dictates that their Bitcoin holdings will be locked for six months. Meaning, once they purchase GBTC shares, they would have to wait half a year before receiving the chance to realize gains.
With Grayscale’s popularity blossoming in late 2020 and early 2021, numerous accredited investors used the company’s products to purchase shares, tracking the performance of the primary cryptocurrency.
Consequently, some of them had their assets unlocked just recently, but the most substantial quantity will come on July 18th.
As Bybt’s graph demonstrates, Grayscale customers will receive the equivalent of over 16,000 bitcoins on that date. With today’s USD prices, this sizeable amount represents nearly $650 million.
Although it’s debatable if all investors would decide to dispose of their assets immediately, such a considerable portion of BTC’s liquid supply could most certainly lead to enhance volatility once it’s unlocked.
Bitcoin in July
Historically, July is actually among the most bullish months for bitcoin, especially in the past few years. Apart from the year-long bear market in 2019 when BTC dipped by 6.6% in July, the cryptocurrency has spiked by double-digits in 2017, 2018, and 2020.
In fact, last year was the best-performing July since Bybt keeps data (meaning – 2013). Some experts have even argued that July 2020 was the actual start of the bull market because it was the first month deep in green after the halving.
Keeping in mind the aforementioned unlocking, this year’s July would be intriguing to follow.