The GBTC market could be in for a major shake-up in July, as the July 4th lock-up expiration event approaches. When the lock-up period expires on July 4, 2014, investors who purchased shares in the Trust on or after February 21, 2014, will have the option of selling their shares back to the market.
After months of drama, the Bitcoin community finally got what it wanted on July 11th 2016, when the price of Bitcoin rose over $200 USD for the first time since July 2015. However, perhaps unsurprisingly, that was only the start of the story. Now that the inevitable post-split rally has started, how can Bitcoin price continue to rise?Bitcoin (BTC) won’t end up moving much after Grayscale’s massive 16,000 BTC release, according to crypto-currency trading firm QCP Capital.
In their latest market update published on July 8, analysts downplayed the popular theory that GBTC will cause BTC price volatility in the coming weeks.
No significant impact expected from GBTC
According to Cointelegraph, Grayscale Bitcoin Trust (GBTC) is expected to release, or unlock, a large amount of BTC after a six-month lockup period.
The size of the issuance planned for this month, while routine, has raised concerns that market volatility will increase and impede a possible recovery.
For example, on the 18th. July, the day of the biggest release, 16,240 BTC, currently equivalent to $530 million, are available.
For QCP, however, there is no cause for concern.
The upcoming releases are for institutional holders who subscribed directly to the GBTC 6 months ago – and this batch consists of all new Q1/2021 positions, mainly the latest ARC tranche, the company explained.
To be clear, we do not expect these releases to have a major impact on the overall market outside the GBTC. Most large institutional positions previously subscribed in kind had been released and were offered for sale at the current discounted price.
In fact, currently the release of GBTC is expected to be completely gone by mid-August, making further selling pressure less likely.
Calendar for the announcement ofGBTC events. Source: Bybt
Macroeconomic factors can prevent a broader collapse of BTC
What gives QCP a headache, however, is the possibility of a major collapse in bitcoin later this year.
Related: The price of bitcoin could reach $85,000 within a few months if indicators turn bullish.
In line with historical precedent, a classic downside scenario could occur at the end of the fourth quarter, followed by a recovery and growth at current levels.
Analysts compared this to 2018, which ended in a bear market at $3,100 – 84% below the all-time high of $20,000 12 months earlier.
Our current trading plan follows the BTC analogy for 2018, where we expect a bearish trading environment until August (short flight), then a rally, perhaps due to the implementation of EIP-1559 in the core network (long spot, long call), then a larger Q4 Wave 5 sell-off due to Fed cuts (sell spot, buy reversals with downside risk), he continued.
Meanwhile, how high BTC/USD has risen during this period is a matter of heated debate. One of the more optimistic proven models is the stock-to-flow model, whose creator, PlanB, considers a December price of $135,000 a worst-case scenario.
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